Here are some of the latest statistics and insights for 2026, indicating that buy-to-let (BTL) rental yields across the UK are expected to rise, alongside key caveats investors should carefully consider in the current market climate.
Key Statistics
According to UK Finance, the average gross buy-to-let rental yield in the UK in Q3 2025 was 7.15%, up from 6.93% in the same quarter in the previous year. In Q3 2025, a total of 59,467 new buy-to-let loans were issued across the UK, with a combined value of £10.9 billion, marking a notable increase compared to previous periods.
The latest available data (heading into 2026) shows a clear regional split in buy-to-let yields, with Wales outperforming the UK average.
Latest Buy-to-Let Rental Yields (2026)
UK average yield: – 6.9%
Wales’ average yield: – 8.8%
Key Insight for 2026
Wales is currently one of the strongest-performing regions in the UK, offering significantly higher yields than the national average. This is largely due to:
- Lower property prices relative to rental income
- Strong tenant demand in key cities like Cardiff
- Continued yield growth into late 2025 and early 2026
Buy To Let Yield – Important Context
RCCIL highlights that while the UK’s average buy-to-let yield, at approximately 6-7% in 2026, appears relatively stable, this headline figure conceals significant regional variation. For example, London continues to deliver lower average yields of around 5.5 – 6%, whereas Wales consistently outperforms, with yields typically reaching between 8 – 9%.
RCCIL also notes that some datasets provide more conservative estimates for Wales, occasionally aligning more closely with the UK average depending on the methodology. However, the majority of investor-focused analysis in 2026 positions Wales firmly above the national benchmark, reinforcing its growing appeal.
Bottom line:
In 2026, with UK yields averaging around 6-7%, Wales stands out at approximately 8-9%, making it one of the most attractive regions for investors seeking strong, income-driven buy-to-let opportunities.
RCCIL analysis indicates that, as of March 2026, the average rent for new lets across the UK stands at approximately £1,319 per month. Annual rental growth has moderated to 1.9%, a notable slowdown from the 2.8% recorded a year earlier, reflecting a shift in market dynamics.
RCCIL observes that the rental market in 2026 is becoming increasingly balanced, with demand easing slightly and supply conditions improving. As a result, tenants are beginning to experience reduced upward pressure on rents, and the pace of rental growth has stabilised. While rents continue to rise across most regions, the rate of increase is significantly lower than the peak levels seen during the rental surge of 2023.
Investment Context Insights
For investors and researchers following RCCIL’s property market analysis, the latest data through 2026 suggests that the UK buy-to-let sector is not only holding steady but also demonstrating renewed resilience. Building on trends observed in 2025, rising yields across many regions in 2026 are creating fresh opportunities, particularly for investors adopting a targeted approach to location and property type.
RCCIL notes that investors seeking stronger returns in 2026 are increasingly looking beyond London and the South East, redirecting their focus towards Northern England, Wales, and Scotland, where yield growth has remained more pronounced. In the current market, a balanced investment strategy is essential, carefully weighing rental performance against long-term capital appreciation, while also accounting for evolving regulations, rising property management costs, and asset selection.
As always, the key lies in understanding the full picture: focusing on net yields and market fundamentals rather than relying solely on headline figures.
Important Caveats – What Rising Yields Really Mean
Gross vs. Net Yield: Many figures refer to gross yield, which does not deduct expenses (such as maintenance, management, voids, tax, and regulatory changes). Net yield will be lower.
Regional variation is significant: The UK average might be ~7%, but that hides substantial differences by region, property type and local dynamics.
Sustainability: Yield increase doesn’t automatically guarantee high returns; factors such as regulatory changes, taxation, landlord costs, and shifts in tenant demand can all impact performance.
The type of property matters: Higher yields tend to be associated with specific property types (e.g., Houses in Multiple Occupation – HMOs) or areas with lower purchase prices. For example, Paragon’s data show HMOs yielding ~8.5% in one dataset.
Richard Rowntree, Paragon Bank’s Managing Director of Mortgages, explains, “Amidst a challenging economic landscape, landlords are naturally seeking avenues to maximise returns, while also grappling with an increased tax burden. HMOs are appealing to investors due to strong demand for affordable housing, particularly in areas where tenants may struggle to afford entire properties.”
Rowntree adds, “Rental inflation, coupled with stabilising house prices, likely contributes to improved yields. While this is encouraging for landlords, it poses challenges for tenants. Reports of increasing housing stock are promising, as addressing the supply-demand imbalance is crucial for maintaining affordable rents and providing tenants with more housing options.”
Summary of Buy-to-Let Yields Rising in 2026
RCCIL highlights that annual landlord yields are showing modest improvement heading into 2026. According to recent market data, yields have remained static in the East and West Midlands, while most other regions have recorded incremental increases of around 0.1%. Notably, Yorkshire & The Humber and the South West have outperformed slightly, with gains of approximately 0.2%.
At the same time, RCCIL points to an ongoing structural undersupply of rental housing. While the number of available rental properties is around 9% higher than a year ago, it remains significantly constrained—still approximately 33% below levels seen a decade ago. This persistent imbalance between supply and demand is expected to continue underpinning rental values, supporting gradual rent increases throughout 2026.
Looking Ahead in 2026
Looking ahead, analysts suggest that the continuation of average yields above 5.8 – 6% in 2026 will encourage more landlords to expand their portfolios, particularly in segments such as HMOs, build-to-rent (BTR), and student housing. However, the balance between supporting investor returns and maintaining tenant affordability will be critical. Government policy, interest rates, and supply-side solutions will all influence how sustainable these yield levels remain in the years ahead.
In 2026, most investors should expect yields in the 5–7% range nationally, with higher-yield opportunities (7–9%+) concentrated in more affordable regional markets where rental demand remains strong relative to property prices.
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*Updated 18th March 2026