Tight supply compared to demand is continuing to push up both yields and rents, Fleet Mortgages’ rental barometer for Q2 2025 has found.
Average rents across all regions rose by 2.9% over the quarter, with particularly notable increases seen in the North East (+21.8%), Wales (+7.8%) and Greater London (+6.5%).
Greater London remains the highest-value rental region, with average monthly rents now at £2,328 per calendar month (pcm), followed by East Anglia at £1,640pcm and the South East at £1,520 pcm.
In contrast, the most affordable rental regions are Yorkshire & Humberside at £861 pcm, the North East at £900pcm and Wales at £1,061pcm, offering landlords attractive affordability profiles combined with increasingly competitive rental returns.
Steve Cox, chief commercial officer at Fleet Mortgages, said: “These latest figures show the private rental sector continues to perform strongly, particularly for landlords who know how and where to invest.
“Rent levels are rising in many areas, yields are holding up well, and we’re still seeing plenty of appetite from both seasoned portfolio landlords and new entrants alike.
“There’s no question that certain regions – particularly Wales and the North East – are offering a compelling mix of affordability and rental return, while the South continues to deliver strong capital value and long-term resilience.”
Rental yields
Rental yields across England and Wales remained steady at 7.5%, up slightly from 7.4% in Q1 2025.
The strongest performing regions were Wales (9%), the North West (8.8%) and the North East (8.7%), all continuing to deliver high income potential relative to property values. Quarter-on-quarter, rental yields increased in four regions, most notably in Wales, which jumped 1.3%.
Although four regions saw modest year-on-year declines in yield, including the North East (-1.4%) and West Midlands (-0.8%), these changes were relatively small and may reflect market readjustment following strong gains in 2023 and early 2024.
More than half (54%) of all Fleet’s Q2 mortgage applications came from landlords with four or more properties, and the average portfolio size now stands at 10 properties.
Cox added: “What’s also clear is the so-called landlord exodus hasn’t materialised – our data shows 39% of business in Q2 was for property purchase, and the average portfolio size has grown to 10 properties.
“This is a sign of landlords actively reshaping and expanding their portfolios in line with evolving tenant demand.”