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

HMOs Drive Landlord Yields Above 7% in Latest Paragon Data

Landlord gross rental yields increased to 7.02% in the three months from April to June 2026, according to the latest data from Paragon Bank. The rise was led by houses in multiple occupation (HMOs), with Scotland, the West Midlands, and Yorkshire and Humber identified as key regions driving this growth.

Paragon Bank’s figures, based on its own lending, show that yields improved compared to the first quarter of 2026, when they stood at 6.96%. The data also indicates that yields have been on an upward trend since 2021, when they were at 5.84%.

By property type, HMOs delivered the highest yields at 8.90%, an increase of 0.14 percentage points. Multi-unit blocks followed at 7.18%. Flats and terraced housing recorded average yields of 6.45% and 6.31% respectively.

Regionally, Scotland experienced the strongest growth in yield performance during the quarter, rising by 0.53 percentage points to 7.97%. The West Midlands saw yields increase by 0.24 percentage points to 7.24%, while Yorkshire and Humber recorded a 0.21 percentage point rise to 7.58%.

Wales retained its position as the strongest yielding location at 8.87%. Scotland’s increase brought it level with the North East, both achieving yields of 7.97%. In contrast, Greater London saw the sharpest decline in yields, falling by 0.16 percentage points to 5.58%. The South East also remained among the lowest yielding regions at 6.48%.

These figures represent the final quarterly data before the introduction of the Renters’ Rights Act. The overall trend, according to Paragon Bank, is one of resilient returns for landlords, with HMOs continuing to offer the highest yields among property types.

For letting agents and inventory clerks, these trends highlight the ongoing importance of HMOs and regional variations in rental yields across the UK property market.