Life as a landlord isn’t getting any easier, but rental returns are on the rise in a minor boon.
The average UK gross buy-to-let rental yield was 7.18% in the last three months of 2025, up from 6.99% in the same period in 2024, according to trade body UK Finance.
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Meanwhile, UK monthly private rents increased by 3.5% to £1,374 on average, over the same 12 month period.
However, new government measures will start hitting landlords’ profits.
Despite headwinds in the market and a future increased tax burden, landlords will be buoyed by rising rental yields – but certain regions offer landlords higher returns on average than others.
What are rental yields?
A rental yield measures how much profit a landlord can expect to make from their rental property each year. It is expressed as a percentage of rental income against the property’s market value.
For example, if you earn £10,000 a year from renting out a property worth £100,000, your rental yield would be 10%.
If you earn £20,000 a year from a rental worth £250,000, your rental yield would be 8%.
The Mortgage Works, the buy-to-let lender of Nationwide Building Society, has a calculator you can use to work out the rental yield of a property.
When talking about rental yields, they are generally broken down into net and gross.
Gross rental yield does not take into account any costs associated with letting a property, such as mortgage payments or insurance, nor does it account for periods when the property is unoccupied and not producing any rental income. Net rental yield does factor in these costs.
Where is the top UK region for buy-to-let?
The region with the highest gross rental yield in 2025 was Northern England (8.6%), according to the latest data from trade body UK Finance.
The number of new buy-to-let loans taken out across the region also surged by 18% year-on-year.
Scotland was the region with the second highest overall gross rental yield in 2025 (8.5%).
The number of buy-to-let loans taken out across the country rose, but at a lower 6%.
In third was Wales (7.7%), where the number of buy-to-let loans taken out saw a significant 29% rise year-on-year.
|
Region |
Gross rental yield |
|
Northern |
8.6% |
|
Yorks and Humber |
7.6% |
|
East Midlands |
6.9% |
|
East Anglia |
6.5% |
|
Greater London |
6% |
|
South East |
6.4% |
|
South West |
6.7% |
|
West Midlands |
6.9% |
|
North West |
7.6% |
|
Wales |
7.7% |
|
Scotland |
8.5% |
|
Northern Ireland |
7.5% |
Credit: UK Finance (May 2026)
Where are the buy-to-let hotspots?
All of the top 10 local authorities where rental yields were highest in 2025 were in Scotland, UK Finance’s latest data found.
The local authorities with the highest rental yields in the UK were Renfrewshire and West Dunbartonshire (9.9%).
North Lanarkshire, Aberdeen City and East Ayrshire (9.6%) were next, then Inverclyde (9.5%).
The council areas with the lowest rental yields are dotted mostly throughout the South of England, where average house prices are generally higher, which can affect landlords’ returns.
South Hams in Devon had the worst rental yield in 2025 (5%), closely followed by Kensington and Chelsea (5.1%), a well-known premium property market in London.
Rental yields were also low in Three Rivers (5.2%) in Hertfordshire, Cambridge (5.3%) and Harborough (5.3%) in Leicestershire.
|
Highest return local authorities |
Gross rental yield |
Lowest return local authorities |
Gross rental yield |
|
Renfrewshire |
9.90% |
South Hams |
5.00% |
|
West Dunbartonshire |
9.90% |
Kensington & Chelsea |
5.10% |
|
North Lanarkshire |
9.60% |
Three Rivers |
5.20% |
|
Aberdeen City |
9.60% |
Cambridge |
5.30% |
|
East Ayrshire |
9.60% |
Harborough |
5.30% |
|
Inverclyde |
9.50% |
Maldon |
5.30% |
|
Falkirk |
9.40% |
Derbyshire Dales |
5.30% |
|
Dundee City |
9.40% |
Torridge |
5.40% |
|
Clackmannashire |
9.30% |
Rutland |
5.40% |
|
South Lanarkshire |
9.30% |
Rochford |
5.40% |
Credit: UK Finance (May 2026)
How energy-efficient buy-to-lets could earn landlords more rent
Recent research from The Mortgage Works has found more energy-efficient buy-to-let properties typically earn more in rental income in England.
It found, on average, those with an Energy Performance Certificate (EPC) of A or B take around 8.1% more in rent than an equivalent D-rated property, worth an extra £85 per month on a typical £1,075 rent.
Homes rated C typically earn an extra £20 (1.8%) a month than similar D-rated properties, while those with an E rating attract a 1.7% lower premium compared to a D-rated home.
The Mortgage Works research also found the increase in average rent from having a more energy-efficient home varies depending on where the property is based.
A property with an EPC rating of A or B in the North of England will earn 13.3% more in rent compared to a like-for-like home in the area with a D rating.
The figures were 9.7%, 7.3% and 4.5% for the Midlands, London and South of England, respectively.
