Tenant demand surges, yields remain strong, and landlords expand portfolios, Fleet Mortgages report finds
The private rented sector (PRS) across England and Wales is showing renewed strength, with rising rents, robust tenant demand, and steady landlord activity underscoring growing market confidence, according to Fleet Mortgages’ Q2 2025 Rental Barometer.
The report reveals average rents increased by 2.9% across all regions in the second quarter of 2025, with standout spikes in the North East (+21.8%), Wales (+7.8%) and Greater London (+6.5%).
Despite those gains, Greater London remains the most expensive region for tenants, with average monthly rents reaching £2,328. East Anglia (£1,640) and the South East (£1,520) follow closely behind, while the most affordable regions for renters include Yorkshire and Humberside (£861), the North East (£900), and Wales (£1,061).
Landlords Capitalise on Rising Yields
Rental yields held firm across the country, averaging 7.5%—a slight uptick from 7.4% in the previous quarter. Wales led the pack with a 9% yield, trailed by the North West (8.8%) and North East (8.7%), offering strong returns relative to property values.
Four regions, including Wales, recorded yield increases in Q2, with the Welsh market seeing the most significant jump at 1.3 percentage points. However, the North East and West Midlands experienced modest year-on-year declines, attributed to a market recalibration following strong growth in 2023 and early 2024.
Fleet Mortgages’ chief commercial officer, Steve Cox, said the data reflects a healthy and adaptive rental sector:
“These latest figures show the private rental sector continues to perform strongly, particularly for landlords who know how and where to invest. Rent levels are rising in many areas, yields are holding up well, and we’re still seeing plenty of appetite from both seasoned portfolio landlords and new entrants alike.”
No Sign of a Landlord Exodus
Contrary to speculation of a landlord exodus, investor activity remains strong. According to Fleet, 54% of Q2 mortgage applications came from landlords with portfolios of four or more properties. First-time landlords accounted for 14% of applications, unchanged from Q1.
Limited company borrowing continues to dominate the buy-to-let (BTL) landscape, representing 81% of all applications—a trend driven by tax efficiencies and structural advantages for larger investors.
The average loan size stood at £198,000, with rental cover at a healthy 187%.
Cox noted that landlords are not retreating but instead recalibrating:
“What’s also clear is the so-called landlord exodus hasn’t materialised. Our data shows 39% of business in Q2 was for property purchase, and the average portfolio size has grown to 10 properties. This is a sign of landlords actively reshaping and expanding their portfolios in line with evolving tenant demand.”
The report paints a picture of a resilient and adaptive PRS, with landlords responding to market signals and continuing to invest, particularly in regions offering a strong mix of affordability and yield.