Tight provide in comparison with demand is constant to push up each yields and rents, Fleet Mortgages’ rental barometer for Q2 2025 has discovered.
Common rents throughout all areas rose by 2.9% over the quarter, with significantly notable will increase seen within the North East (+21.8%), Wales (+7.8%) and Better London (+6.5%).
Better London stays the highest-value rental area, with common month-to-month rents now at £2,328 per calendar month (pcm), adopted by East Anglia at £1,640pcm and the South East at £1,520 pcm.
In distinction, essentially the most reasonably priced rental areas are Yorkshire & Humberside at £861 pcm, the North East at £900pcm and Wales at £1,061pcm, providing landlords enticing affordability profiles mixed with more and more aggressive rental returns.
Steve Cox, chief industrial officer at Fleet Mortgages, mentioned: “These newest figures present the non-public rental sector continues to carry out strongly, significantly for landlords who understand how and the place to speculate.
“Hire ranges are rising in lots of areas, yields are holding up properly, and we’re nonetheless seeing loads of urge for food from each seasoned portfolio landlords and new entrants alike.
“There’s no query that sure areas – significantly Wales and the North East – are providing a compelling mixture of affordability and rental return, whereas the South continues to ship robust capital worth and long-term resilience.”
Rental yields
Rental yields throughout England and Wales remained regular at 7.5%, up barely from 7.4% in Q1 2025.
The strongest performing areas had been Wales (9%), the North West (8.8%) and the North East (8.7%), all persevering with to ship excessive revenue potential relative to property values. Quarter-on-quarter, rental yields elevated in 4 areas, most notably in Wales, which jumped 1.3%.
Though 4 areas noticed modest year-on-year declines in yield, together with the North East (-1.4%) and West Midlands (-0.8%), these modifications had been comparatively small and should replicate market readjustment following robust good points in 2023 and early 2024.
Greater than half (54%) of all Fleet’s Q2 mortgage purposes got here from landlords with 4 or extra properties, and the common portfolio dimension now stands at 10 properties.
Cox added: “What’s additionally clear is the so-called landlord exodus hasn’t materialised – our information reveals 39% of enterprise in Q2 was for property buy, and the common portfolio dimension has grown to 10 properties.
“It is a signal of landlords actively reshaping and increasing their portfolios according to evolving tenant demand.”
