Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Annual Rental Yields Up, but Quarterly Dips in Most Regions
Fleet Mortgages’ latest Buy-to-Let Rental Barometer shows that average annual rental yields across England and Wales rose by 0.3% to 7.8% in Q2 2026 compared to Q2 2025. However, six out of ten regions experienced a quarterly dip in yields, with the national average falling from 8.1% in Q1 to 7.8% in Q2.
The North East continued to lead the regional table, with annual rental yields up by 0.5%. Despite this, the North East also saw a quarterly fall of 0.6%, bringing its yield to 9.2%. The North West moved into second place with an average yield of 8.8%. Six regions, including Yorkshire and Humberside, Wales, and both the East and West Midlands, maintained yields above 8%.
Higher-yielding areas in the North and Midlands continued to outperform the South. Wales and the South West saw an annual fall in yields. The only regions to see quarterly increases in average yields were the East Midlands, Greater London, and the North West, while the South East remained unchanged.
Market Activity and Landlord Trends
Fleet Mortgages reported that both its own average product rates and market average two- and five-year fixed rates rose quarter-on-quarter. However, the latter half of Q2 saw greater market stability, with lenders reintroducing previously withdrawn products and making price cuts to existing offerings.
Purchase activity for Fleet increased from 33% in Q1 to 36% in Q2. The share of applications from landlords with six to fourteen properties grew from 26% to 30%, while those with fifteen or more properties accounted for 26% of applications. First-time landlord applications made up 9% of all business, down from 11% in Q1.
The professionalisation of the landlord sector continued, with the average number of investment properties held by Fleet borrowers remaining at 16, compared to 10 in Q2 last year. Limited company borrowing dominated, accounting for 78% of all borrowing, while private investors made up 22%.
Source: Mortgage Strategy