New data from Fleet Mortgages' latest Rental Barometer shows that the differences in rental yields between North and South England narrowed in the second quarter of 2026. This trend indicates a convergence of return prospects across the English and Welsh property market.
Across England and Wales, average rental yields rose by 0.3 percentage points year-on-year, reaching 7.8% in the second quarter. This development underscores the consistently robust performance of the rental sector and the attractiveness of property investments in these regions.
The reduction in the North-South yield gap is particularly noteworthy. While traditionally higher yields were observed in northern regions, conditions now appear to be converging. Fleet Mortgages highlights in its analysis that this could be attributed to increased demand and associated rent increases in more southern areas, including London, which previously often exhibited lower percentage yields despite higher absolute rental values.
Regional Developments and London as a Factor
Fleet Mortgages' analysis suggests that increased returns in London are playing a significant role in narrowing this regional divide. For a long time, yields in the capital were considered more moderate compared to other regions, but the current development indicates a dynamisation in this high-priced market segment as well. Investors could now achieve more attractive returns in Greater London again, which impacts the nationwide average level.
Experts from Fleet Mortgages point out that the overall development of rental yields is an important indicator for the health of the buy-to-let market. A slight increase in the average, combined with the reduction of regional differences, suggests a more balanced and potentially more stable market, which could be attractive to a wider range of investors. These trends are expected to be closely monitored in the coming quarters to identify sustainable patterns.
- —Average rental yield in England and Wales: 7.8% (Q2/2026).
- —Annual increase in rental yield: 0.3 percentage points.
- —North-South yield gap observed to be narrowing.
- —Increase in London rental yields contributed to the convergence.
