According to Paragon’s Q4 2025 Buy-to-Let Yields report, the gross rental yield for flats and terraced homes came to 6.33% and 6.28% at the end of the year. These were up by 0.24% and 0.23% year-on-year respectively.
Looking at HMOs and MUBs, the gross rental yield stands at 8.61% and 7.32% respectively, rises of 0.2% and 0.02% annually.
Regarding other property types, semi-detached homes reported a gross rental yield of 5.45%, a fall of 0.11% year-on-year, followed by bungalows at 5.13%, up 0.06% on the period.
Detached homes’ gross rental yield came to 4.54%, a decrease of 0.07% from Q4 2024 to Q4 2025.
From a regional perspective, Wales had the strongest rental yield, at 8.83%, followed by the North East at 8.2% and the East Midlands at 7.69%.
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At the other end of the spectrum, Greater London had a rental yield of 5.78%, with the South East coming to 6.3% and the West Midlands standing at 7.08%.
The fastest growing region was Wales at 0.74%, followed by the North East at 0.38% and Greater London at a 0.3% improvement year-on-year.
West Midlands and the South West fell by 0.29% and 0.24% annually, with the South East and East Anglia contracting by 0.12% year-on-year.
Louisa Sedgwick, Paragon Bank’s managing director of mortgages, said: “Yields have performed strongly since summer 2022, when house price growth began to slow and rental inflation accelerated due to the imbalance between supply and demand. While we saw this momentum ease last year as the market normalised, we expect yields to remain stable throughout this year.
“Although overall yield growth was relatively flat in 2025, certain property types and regions stood out, reflecting varied local market conditions and shifting demand for specific kinds of homes.”
