The gap between rental yields in North and South England has narrowed, according to Fleet Mortgages' latest Rental Barometer. Average rental yields across England and Wales rose by 0.3 percentage points annually to 7.8% in the second quarter, up from 7.5% in the same period last year. However, this rise was slower than the 8.1% average seen in the first quarter of 2026.
The North East continued to offer the highest average rental yield at 9.2%, despite a 0.6 percentage point fall compared with the previous quarter. Yorkshire and Humberside recorded a 0.3 percentage point decline, while yields in the West Midlands fell by 0.6 percentage points. By contrast, yields in Greater London increased from 6.1% to 6.3% during the quarter, while the South East remained unchanged at 6.9%.
Fleet Mortgages' Rental Barometer also highlighted signs of improving activity in the buy-to-let market. Purchase business increased from 33% of mortgage applications in the first quarter to 36% in the second, while more than 62% of applications came from portfolio landlords with four or more properties. Limited company borrowing accounted for 78% of all applications.