Landlord yields were strongest in Wales and the North East of England in 2025, Paragon’s Q4 Buy-to-Let Yield Report has revealed.
Yields in Wales grew by 0.74% to 8.83%, followed by the North East, up 0.38% to 8.20%. They also performed better in Greater London, increasing 0.30% to 5.78%.
Overall yields remained flat during the year, finishing Q4 at 6.93%.
Louisa Sedgwick, Paragon Bank managing director of mortgages, said: “Yields have performed strongly since summer 2022, when house price growth began to slow and rental inflation accelerated due to the imbalance between supply and demand.
“While we saw this momentum ease last year as the market normalised, we expect yields to remain stable throughout this year.”
HMOs achieved the strongest rental yield in 2025, at 8.61%, rising by 0.20% year-on-year.
After HMOs, multi-unit blocks achieved the second highest yield by property type at 7.32% during Q4 2025, followed by flats and terraced homes.
Yields on flats finished the year at 6.33%, 0.24% higher annually, with terraced homes 0.23% higher at 6.28%.
Sedgwick added: “Although overall yield growth was relatively flat in 2025, certain property types and regions stood out, reflecting varied local market conditions and shifting demand for specific kinds of homes.”