Average gross buy-to-let yields have reached their highest level for more than 15 years, according to new analysis from Paragon Bank.

It reports that yields rose 0.22 percentage points from 7% during the third quarter of 2026, driven by more subdued house price growth and continued demand for privately rented homes.

Regionally, landlords buying or remortgaging property in the East Midlands generated the highest average yield at 8.1%, while Greater London continued to generate the lowest average regional yield at 5.7%.

HMOs generated the highest average yield (8.8%), although this was 0.06 percentage points lower than in the previous quarter. Multi-unit blocks produced the second-highest yield at 7.3%, followed by flats (6.6%) and terraced homes (6.4%).

Fleet Mortgages confirms a similar trend, with a year-on-year increase across eight out of 10 regions in England and Wales, and the average annual rental yield up from 7.5% to 7.9%. It reports that only the North West and Wales recorded year-on-year reductions, while Yorkshire & Humberside moved to the top of the regional yield table following a strong 12 months.

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Fleet says the regional figures demonstrate the different investment dynamics landlords continue to encounter, with higher yields not necessarily translating directly into higher levels of purchase activity in some regions.

Yorkshire & Humberside combined the highest average yield at 9.3% with purchase business accounting for 43% of Fleet applications in the region during Q3. However, Wales recorded the highest proportion of purchase business of any region at 46%, despite average yields falling from 8.1% in Q2 to 7.5% in Q3 and average monthly rents reducing from £1,214 to £1,079.

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Paragon Bank managing director of mortgages, Louisa Sedgwick, says: “The regional figures also show why landlords carefully consider local market conditions when investing. Areas with more affordable property values and sustained tenant demand can offer particularly attractive yields, as we see in the East Midlands and across the north of England.”

Meanwhile, Propertymark reports that the average UK monthly rent is £1,522, meaning that tenants would need a £45,660 salary. Rents fell in nine of the 11 regions month-on-month, with Scotland recording the largest drop at 3.4%, followed by the North West at 2.5% and London and the South West at 2.1%.

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