Here are some of the latest statistics and insights indicating that buy-to-let (BTL) rental yields in the UK are expected to rise in 2025, along with some caveats to consider.
Key Statistics
According to UK Finance, the average gross buy-to-let rental yield in the UK in Q2 2025 was 7.26%, up from 6.90% in Q2 2024.
UK Finance
A report from Paragon Banking Group highlights that in April 2025, Wales had average yields of 8.43%, up from 8.09% in December 2024. Other strong regional yields included:
Yorkshire & Humberside: 7.97%
North: 7.94%
North West: 7.85%
Greater London: lowest at 5.78%.
A further dataset from Zoopla shows that some cities offer gross yields of 8% or more (e.g., Sunderland, ~9.3%, Aberdeen, ~8.3%, Burnley, ~8.2%). The yields have improved as house prices have fallen or stabilised, while rents have continued to rise.
A survey via Aldermore Bank found a “typical yield” of 6.6% in its landlord survey for 2025 (up from 5.9% the prior year).
What this means
The yield numbers show a clear upward trend: yields are not stagnant, but improving in many regions of the UK.
Regions with lower property purchase prices and strong rental demand are doing exceptionally well (e.g., Wales, North of England).
Urban centres where property prices are high (e.g., Greater London) still show lower yields — so location remains critical.
The increase in yields is being helped by two broad factors: modest rental growth (or strong rental demand) combined with either stabilising or falling property prices in some areas.
Investment Context Insights
For investors and researchers following RCCIL’s property market analysis, the data for 2025 indicates that the UK buy-to-let sector is not only holding steady but showing signs of renewed strength. Rising yields across many regions are creating fresh opportunities, particularly for those who take a targeted approach to location and property type.
Investors seeking higher returns are increasingly looking beyond London and the South East, turning their attention to Northern England, Wales, and Scotland, where yields have climbed more sharply. A balanced investment strategy should continue to weigh rental performance against long-term capital growth, while factoring in regulatory shifts, property management costs, and the type of asset.
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 2025
The report also reveals apparent regional variations in yields. Landlords in North East England achieved the highest average yield at 7.0%, followed by Yorkshire & The Humber at 6.6%. In contrast, landlords in London, particularly those in Outer London, reported more modest returns, with average yields of 5.2% and 5.7%, respectively. These figures reinforce the trend that while London remains a haven and capital appreciation play, regional cities often offer stronger income-generating opportunities, an essential factor for global property investors looking to diversify across the UK.
Looking ahead, analysts suggest that the continuation of average yields above 6% in 2025 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.
Learn more about the future landscape of the London property market with our latest report.
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*Updated November 2025