Editor's note: This brief was summarised by The Property AI Newsroom from a report by PropertyWire. Read the original article for full details.

Buy-to-let Yields Dip in Q2 2025 Despite Annual Growth

Rental yields for buy-to-let landlords declined in the second quarter of 2025 across most regions in England and Wales, according to new data from Fleet Mortgages. Despite this quarterly drop, average yields remained higher than the same period last year.

Fleet Mortgages’ latest Buy-to-Let Rental Barometer shows that six out of ten regions experienced a quarter-on-quarter decrease in yields, falling from 8.1% in Q1 to 7.8% in Q2. However, yields were still 0.3% higher compared to Q2 2024.

Regional Performance

The North East continued to deliver the highest rental yields at 9.2%, representing an annual increase of 0.5%. This figure, however, marks a 0.6% decline from the previous quarter. The North West moved into second position with yields of 8.8%.

Six regions maintained yields above the 8% threshold, including Yorkshire & Humberside, Wales, and both the East and West Midlands. Northern and Midlands areas continued to outperform southern regions, while Wales and the South West recorded annual declines.

Market Activity and Regulatory Context

The data comes as landlords adjust to new regulatory frameworks, with the Renters’ Rights Act introduced in May 2025 prompting some investors to reconsider their portfolios. The findings indicate that, despite short-term yield compression, the buy-to-let market continues to attract professional investors, particularly in higher-yielding regions. The quarterly decline may reflect ongoing challenges facing landlords, including regulatory changes and rising operational costs.

These trends are relevant for letting agents and inventory clerks monitoring regional market shifts and regulatory impacts on landlord activity.