Growth continues but six out of ten regions see quarterly falls
Annual rental yields across most of England and Wales have continued to rise when compared to the same time last year, but six out of ten regions saw a quarterly dip, according to Fleet Mortgages’ latest Buy-to-Let Rental Barometer for Q2 2026.
It shows that nationally, average yields for England & Wales rose by 0.3% annually to 7.8%. However, that is down from 8.1% in Q1.
Regionally, annual rental yields have grown strongest in the North East, up 0.5% to 9.2%. However, that’s a 0.6% fall from the last quarter.
The North West is now in second place, with an average rental yield of 8.8% – the same as last year. Six other regions continue to offer yields above 8%, including Yorkshire & Humberside (8.7%), Wales (8.1%), East Midlands (8.1%) and West Midlands (8.0%).
Wales and the South West have seen annual falls, down 0.9% to 8.1% and 0.5% to 6.6% respectively, but quarter-on-quarter most regions have seen a decline in average yields. However, the East Midlands, Greater London and the North West saw quarterly rises while the South East stayed the same.
Purchase activity rises
Fleet’s own average product rates and market average two- and five-year fixed-rates rose quarter-on-quarter, but the greater market stability of the latter half of Q2 allowed it to reintroduce products withdrawn earlier in the year and announce price cuts.
Purchase activity for Fleet grew from 33% in Q1 to 36% in Q2, closer to last year’s share of 39% of all lending business. Meanwhile, 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.
First-time landlord applications represented 9% of all business, slightly down on the 11% recorded in the first three months of the year.
The average number of investment properties held by Fleet borrowers stayed at 16, compared to 10 in Q2 last year. Limited company business continued to dominate with 78% of all borrowing coming from corporate vehicles, compared to just 22% for private investors.
Steve Cox, chief commercial officer at Fleet Mortgages, said: “Q2 for the buy-to-let and wider mortgage market has effectively been a ‘flip reverse’ of Q1. It began with considerable uncertainty as financial markets reacted to events in the Middle East, meaning funding costs increased and lenders had to adjust pricing accordingly.
“However, the latter weeks of June in particular have been much more encouraging, with greater stability returning, swap rates easing and lenders like ourselves once again able to compete through lower rates and a broader range of products.
“While it’s important not to assume this calmer environment will continue indefinitely, the market is undoubtedly ending the quarter in a stronger position than many expected a few months ago.”
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