Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.
North-South Rental Yield Gap Narrows in Q2 2026, Reports Fleet Mortgages
The gap between rental yields in North and South England narrowed during the second quarter of 2026, according to Fleet Mortgages’ latest Rental Barometer. The lender reported that average rental yields across England and Wales rose by 0.3 percentage points annually to 7.8% in Q2, though this was a decrease from 8.1% in the first quarter of 2026.
The North East continued to offer the highest average rental yield at 9.2%, despite a 0.6 percentage point fall compared with the previous quarter. Yorkshire and Humberside saw a 0.3 percentage point decline, while yields in the West Midlands dropped by 0.6 percentage points. In contrast, yields in Greater London increased from 6.1% to 6.3% during the quarter, and the South East remained unchanged at 6.9%.
Fleet Mortgages stated that while the traditional North-South divide in rental yields remains, it is becoming less pronounced as yields in higher-yielding northern regions begin to plateau.
The lender also noted signs of improving activity in the buy-to-let market. Purchase business accounted for 36% of mortgage applications in the second quarter, up from 33% in the first quarter. More than 62% of applications came from portfolio landlords with four or more properties, and limited company borrowing made up 78% of all applications.
Fleet Mortgages reported that the mortgage market experienced significant volatility in the early part of the quarter due to financial market reactions to the conflict in Iran and rising swap rates. However, conditions improved later in the quarter, enabling lenders to reduce mortgage rates and reintroduce products that had been withdrawn during the period of uncertainty.
These developments are relevant for UK letting agents and inventory clerks monitoring regional rental trends and landlord activity, as well as those tracking changes in mortgage product availability and landlord borrowing patterns.
Source: Property Industry Eye