Paragon Bank’s figures show this is an increase in rental yields from 6.92% in the prior quarter.
The report noted that it also represents a 30 basis point increase on the same period in 2023.
The bank said the improvement in average rental yields is a continuing trend, with yields growing since 2022.
This was attributed to house price inflation stabilising and rents continuing to rise due to an imbalance between supply and demand of rental property.
The highest yields were found in Wales at 8.09%, followed by the North West with a yield of 7.84% and the South West at 7.75%.
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Landlords in Greater London reported a rental yield of 5.48%, which is the lowest.
Houses in multiple occupation (HMOs) generated the highest yields of 8.4%, followed by freehold blocks at 7.28%, flats at 6.09% and terraced houses at 6.05%.
Russell Anderson, Paragon Bank’s mortgages commercial director, said: “A 13-year high in average rental yields is evidence of the market being in much better health than some would have you believe. Where landlords invest strategically, purchasing in areas where homes are relatively affordable and targeting more complex property types, buy to let delivers strong returns.
“A key component of this is demand, something that has outstripped the supply of privately rented homes for some time. This has caused market rents to rise, which, in turn, has helped to sustain strong yields despite house price inflation.”
He added: “While yields are a good indicator of the regular income that landlords will typically see, to get a complete picture of the returns an investment property can generate, we must also take into account aspects such as how they are financed, capital gains, landlord deposit and any improvements that have been made.”
