Rental yields across England and Wales increased year-on-year to Q1 2026 across every region, according to Fleet Mortgages’ latest rental barometer.

Average yields rose 0.7% to 8.1%, with the North East continuing to top the charts, where landlords saw returns of 9.8%.

However, the lender says investors are already beginning to take a more cautious approach as purchase activity has started to soften, with applications falling to 33% of total business (down from 39% a year ago) – before the volatility seen in the market last month.

Fleet Mortgages believes the sector continues to be driven by more experienced landlords as more than 63% of applications came from those holding four or more properties, while the proportion with 15 or more properties rose to 30%. Limited company borrowing now accounts for 78% of all applications.

Worrying

The most recent RICS UK Residential Market Survey paints a worrying picture of the PRS, with a net -25% of agents reporting that landlord instructions fell in March. Agents across the UK cite the Renters’ Rights Act – as well as the Middle East conflict - as the catalyst not only for a lack of purchases, but also a lack of available properties.

David Hickman, at Pinnacle Surveyors in South Devon, says bluntly: “With more landlords selling now than ever, the rental market has been trashed by government policy. Some renters are becoming sharers in crowded accommodation like 100 years ago. The few with increased wages that can bid over the asking rental do so and some reluctantly are forced to buy.”

Increase

“We’re seeing an increase in managed instructions from landlords jittery about the Renters’ Rights Act, but this is being offset by the increasing numbers looking at selling because of the act,” says Will Ravenhill at Leicester-based Readings Property Group.

Alex Mcneil, at Bramleys in Huddersfield, adds: “The big bang that is the Renters’ Rights Act is approaching fast as rents continue to increase as stock levels contract. Tenant vetting is now even more robust and borderline applications are now likely to be declined. The transition has started.”

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