Yorkshire tops rental yield rankings as portfolio landlords grow presence

Average annual rental yields grew during the third quarter of 2026 but it is mainly larger BTL landlords who are boosting their portfolios.

The Fleet Mortgages Quarterly Rental Barometer, which provides a regional snapshot of rental yield trends alongside lending and borrower data, shows that average yields rose year-on-year from 7.5% to 7.9% in Q3 2026.

Quarter-on-quarter, only East Anglia, the North West and Wales experienced slower levels of growth but still had returns above 8%, while the North East remained unchanged at 9.2%.

Yorkshire & Humberside moved to the top of the regional yield table during Q3, increasing from 8.2% a year ago and 8.7% last quarter to 9.3%. The North East was second at 9.2%, while the North West, East Midlands and West Midlands all continued to deliver average yields above 8%.

Greater London remained the lowest-yielding region at 6.4%, although it continued to command the highest average monthly rent at £2,597.

At the other end of the rental value table, the North East recorded the lowest average monthly rent at £792.

Fleet said the Q3 figures also provided further evidence of the continuing professionalisation and growth of the landlord community, despite another quarter characterised by volatile financial markets and mortgage pricing.

The average number of investment properties owned by Fleet borrowers increased from 16 in Q2 to 18 in Q3, compared with 12 properties in Q3 2025. Landlords with 15 or more BTL properties accounted for 30% of applications during the quarter, up from 26% in Q2 and 23% a year ago, while 66% of applications came from landlords owning four or more properties.

At the same time, the proportion of applications from landlords with between one and three properties fell from 29% in Q2 to 24%, while first-time landlord applications edged upwards from 9% to 10%.

Overall purchase activity eased during the quarter, accounting for 34% of Fleet business compared with 36% in Q2, although this remained above the 33% recorded during Q1.

Average rental cover at origination fell from 144% to 132%, reflecting the affordability pressures created by higher mortgage rates and funding costs.

Limited company borrowing also continued to dominate, accounting for 71% of all applications during Q3, although this was down from 78% in the previous quarter.

Mortgage pricing also reflected the volatility seen during the quarter, Fleet said, with the average market two-year fixed rate increasing from 4.78% to 4.89% and the average five-year fixed rate rising from 5.44% to 5.57%.

Fleet's own average two-year pricing increased from 4.50% to 4.61%, while its average five-year rate moved in the opposite direction, falling by 18 basis points from 5.35% to 5.17%.

Steve Cox, CCO at Fleet Mortgages (pictured above), said: “Q3 has been another quarter in which advisers and their landlord clients have had to deal with considerable uncertainty, particularly as geopolitical developments have continued to feed through into energy prices, inflation expectations, swap rates and ultimately mortgage pricing.

“It is therefore not surprising to see purchase activity ease slightly during the quarter, or rental cover come under further pressure, but we should be careful about interpreting either of those movements as landlords stepping away from BTL.

“What remains encouraging is that, despite everything the sector has dealt with during 2026, experienced landlords are continuing to invest and new landlords are still entering the market.

“Conditions may continue to move, but our Q3 figures suggest the longer-term commitment of professional landlords to the private rental sector remains strong.”