Average rental yields for England and Wales were up 0.3% annually to 7.8% in the second quarter of the year, but saw a short-term dip from 8.1% in Q1, according to Fleet Mortgages.

The lender’s Buy-to-Let Rental Barometer for Q2 2026 reveals that the North East continues to lead, with annual rental yields up by 0.5%, however quarter-to-quarter it has also seen a fall of 0.6% to 9.2%. The North West moved into second spot with an average rental yield of 8.8% while six regions continue to hold above 8%: Yorkshire & Humberside, Wales, and both the East and West Midlands.

The majority of regions have seen a quarterly fall in average yields, with the only exceptions being the East Midlands, Greater London and the North West which saw increases, and the South East which stayed the same.

There was positive news in terms of purchase activity which grew quarter-on-quarter for Fleet from 33% in Q1 to 36% in Q2. The lender says this was closer to that of a year ago when purchases accounted for 39% of all lending business.

Share

The share of applications received from landlords with six-14 properties grew from 26% in Q1 to 30% in Q2, while landlords with 15 or more properties accounted for 26% of applications. At the same time, first-time landlord applications represented 9% of all business, slightly down on the 11% recorded in the first three months of the year.

Fleet also highlighted how the professionalisation of the landlord community was continuing with the average number of investment properties held by Fleet borrowers maintained at 16, compared to 10 in Q2 last year. Meanwhile, limited company business continued to dominate, with 78% of all borrowing coming from corporate vehicles, compared to just 22% for private investors.

Stability

Steve Cox, chief commercial officer at Fleet Mortgages, says greater stability is returning, swap rates are easing and lenders are once again able to compete through lower rates and a broader range of products.

“Our figures also continue to show professional landlords remain active,” adds Cox. “Purchase activity has picked up, portfolio landlords continue to expand where opportunities exist and limited company borrowing remains the preferred route for most investors. Those are all positive indicators for the underlying strength of the buy-to-let sector.”

‍