The Paragon Bank Q2 Buy-to-Let Yield Report showed that this 0.79% percentage point increase was the highest of all regions across England, Scotland and Wales.
The lender suggested that cities such as Plymouth and Taunton helped drive this growth, as returns of 9.51% in Plymouth saw it top the table compared to all other cities.
Paragon’s recent buy-to-let (BTL) hotspot index showed that Plymouth’s PL4 postcode saw the second-highest purchase volumes in the year to 30 June, behind Cardiff’s CF24.
Taunton had the 14th-highest returns, at 8.36%.
The current report showed that yields in the East Midlands sat at 7.48% in Q2, up 0.77 percentage points from the same period last year.
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Meanwhile, there was a 67 basis point rise in East Anglia to 7.67%, making it the third highest for rental yields.
This was followed by the West Midlands, with a 0.52 percentage point increase to 7.42%.
Scotland was the only region to record a fall in average rental yields, with a 0.08% drop to 7.48%.
Growth in the North East was flat at 0.01% to 8.1%.
Meanwhile, Wales attracted the highest return at 8.59%, up from 8.24% the year before.
The lowest yield was seen in Greater London, which moved from 5.63% to 5.73% year-on-year.
|
Region |
Q2 2024 yield (%) |
Q2 2025 yield (%) |
Change (% ppt) |
|
South West |
7.27 |
8.06 |
0.79 |
|
East Midlands |
6.71 |
7.48 |
0.77 |
|
East Anglia |
7 |
7.67 |
0.67 |
|
West Midlands |
6.9 |
7.42 |
0.52 |
|
South East |
6.24 |
6.69 |
0.45 |
|
Wales |
8.24 |
8.59 |
0.35 |
|
North West |
7.66 |
7.92 |
0.26 |
|
Yorkshire and the Humber |
7.75 |
7.87 |
0.12 |
|
Greater London |
5.63 |
5.73 |
0.1 |
|
North East |
8.09 |
8.1 |
0.01 |
|
Scotland |
7.56 |
7.48 |
-0.08 |
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “It’s encouraging to see that most regions across England, Scotland and Wales have seen a steady increase in the average yields over the past year. Additionally, potential returns remain near the record-high level we reported earlier in the year. A key component of this is the continued demand for rented property. Alongside long-term capital gains, this illustrates the enduring appeal of buy-to-let investment.
“It is important to note, however, that while yields offer a useful snapshot of the regular income landlords can expect, a full understanding of an investment property’s returns also requires considering factors such as financing methods, capital appreciation, the initial deposit, and any enhancements made to the property.”
