A report from Paragon Bank, which examined its lending data, showed that the average rental yield in February 2011 was 7.12%.
The average rental yield figure for April surpassed the previous high of 6.94% recorded in Q4 2024, which was a 13-year high.
The report noted that average rental yields have been climbing upward since the “low” of 4.91% in May 2017.
Paragon Bank added Wales had the highest yield, at 8.43%, followed by Yorkshire and the Humber at 7.97% and the North at 7.94%.
At the other end of the spectrum was Greater London at 5.78%, the South East at 6.57% and Scotland at 7.46%.
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Property types also have an impact, with houses in multiple occupation (HMOs) reporting yields of 8.5%, up from 8.41% in December last year.
The data on BTL purchase and remortgage shows the latest rental income to property value ratio has grown by 40 basis points year-on-year.
This shows “moderation of house price inflation alongside rent increases, driven by continued high levels of tenant demand and undersupply of privately rented homes”.
Russell Anderson, Paragon Bank’s commercial director of mortgages, said: “Our latest lending data highlights how average rental yields have continued to increase from the 13-year high we revealed at the end of last year. While the most recent economic instability caused by the threat of Trump’s tariffs is understandably impacting business confidence across many sectors, these figures offer tangible evidence that buy to let continues to offer strong returns for investors.
“This is particularly true where landlords employ a strategy of targeting properties that offer higher returns, HMOs being the most obvious example, or investing in areas where property is relatively more affordable but benefits from the strong tenant demand we see all over the UK.”
