Recent figures from Paragon Bank show that buy-to-let properties are now offering the highest average rental yields seen since February 2011.
Based on the bank’s lending data, landlords achieved an average yield of 7.11% in April 2025. This is just a fraction below the previous high of 7.12% recorded over 14 years ago.
The rise follows a series of monthly increases during the first quarter of this year. The latest figure now exceeds the 6.94% recorded at the end of Q4 2024, which was already considered a significant milestone as a 13-year high.
Paragon’s data on both buy-to-let purchase and remortgage applications also shows that the current rental income compared to property value has grown by 40 basis points year-on-year.
This growth has been supported by a slowdown in house price increases and a rise in rental prices. High demand from tenants and a shortage of available rental properties continue to push up rental yields.
Looking at the broader trend, rental yields have been steadily improving since hitting a low of 4.91% in May 2017.
Russell Anderson, Commercial Director of Mortgages at Paragon Bank, said the data confirms that rental yields have continued to rise since the previous record at the end of last year.
He acknowledged that the wider economic uncertainty – such as the impact of potential new tariffs from the United States under Donald Trump – may be affecting confidence across various sectors.
However, despite this, the figures clearly show that the buy-to-let market is still delivering solid returns for landlords and property investors.
Landlords who focus on properties with higher potential returns are continuing to benefit, especially when investing in HMOs (Houses in Multiple Occupation). These types of properties are a popular choice for those aiming to maximise rental income. Similarly, many landlords are choosing areas where house prices are still relatively affordable but where tenant demand remains high across much of the UK.
Wales has emerged as a standout region for buy-to-let investors. As of April 2025, the average rental yield there reached 8.43%, an increase from 8.09% in December 2024. This makes it the best-performing area in terms of rental returns.
On the other hand, Greater London continues to deliver the lowest rental yields, with average returns sitting at 5.78%. Despite this, there has been a slight improvement of 30 basis points since the final quarter of 2024.
| Region | Yield |
| Wales | 8.43% |
| Yorkshire & Humberside | 7.97% |
| North | 7.94% |
| South West | 7.93% |
| North West | 7.85% |
| East Anglia | 7.60% |
| West Midlands | 7.52% |
| East Midlands | 7.49% |
| Scotland | 7.46% |
| South East | 6.57% |
| Greater London | 5.78% |
When looking at the data by property type, it becomes clear that more complex investment options generally provide the best rental yields. HMOs, in particular, stand out as a top choice for landlords seeking higher returns.
The average yield for HMOs has increased to 8.50%, up from 8.41% recorded in December of last year. This steady rise highlights their continued appeal in the buy-to-let market.
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