Paragon Bank analysed its own lending data to reveal that average rental yields of 7.11% were achieved by landlords in April 2025.
The buy-to-let specialist lender said this is the highest level since February 2011, and comes after consecutive monthly increases during the first quarter of this year.
Over a longer term, an overall upward trend in average yields has been evident since the low of 4.91% of May 2017.
Paragon’s buy-to-let data showed a moderation of house price inflation alongside rent increases, driven by continued high levels of tenant demand and undersupply of privately rented homes.
Russell Anderson, Paragon Bank’s commercial director of mortgages, said: “Our latest lending data highlights how average rental yields have continued to increase from the 13-year high we revealed at the end of last year.
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“While the most recent economic instability caused by the threat of Trump’s tariffs is understandably impacting business confidence across many sectors, these figures offer tangible evidence that buy-to-let continues to offer strong returns for investors.
“This is particularly true where landlords employ a strategy of targeting properties that offer higher returns, HMOs being the most obvious example, or investing in areas where property is relatively more affordable but benefits from the strong tenant demand we see all over the UK.”
Regional split
Wales continues to be the region offering the strongest returns on buy-to-let investments, with average yields of 8.43% in April 2025, up from 8.09% since December 2024.
Greater London remains the region where landlords achieve the lowest rental yields of 5.78%, despite an increase of 30 basis points since Q4 2024.
Below is a breakdown of regional rental yields:
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%.
