The rental market has shown an unexpected resilience, bucking trends in the volatile mortgage sector with a 0.3% annual increase in average yields across England and Wales. According to Fleet Mortgages' Rental Barometer, this slight rise brings the overall yield to 7.8%, despite six out of ten regions experiencing a quarterly decline.
The North East remains the top-performing region, boasting an impressive average rental yield of 9.2%, although it also saw a 0.6% drop on a quarterly basis. The North West has moved into second place with an average yield of 8.8%. Six regions now have average yields above 8%, including Yorkshire & Humberside, Wales, and both the East and West Midlands.
While most regions saw a quarterly dip in average yields, the East Midlands and Greater London saw increases of 0.6% and 0.3% respectively. The North West also recorded a rise, highlighting regional variations influenced by local economic factors and demand dynamics.
Fleet Mortgages' chief commercial officer Steve Cox noted a return to stability in the wider mortgage market, driven partly by the Monetary Policy Committee holding the Bank Base Rate and easing inflation concerns. This improved environment saw swap rates decrease and lenders offering more competitive rates and products.
The data also shows sustained activity among professional landlords, with those managing six to fourteen properties increasing from 26% in Q1 to 30% in Q2, while those with fifteen or more properties accounted for 26% of applications. This suggests portfolio landlords are actively expanding their holdings where opportunities arise, with limited company borrowing remaining a preferred route.