Boost for landlords as buy-to-let yields hit new high

Landlords have finally got some good news as figures show buy-to-let yields are at a 15-year high, it has been revealed.

Paragon’s third quarter 2026 Buy-to-Let Yields report showed gross yields rose 0.22 percentage points from 7.00% in the second quarter of 2026 and was 0.28 percentage points higher than the 6.94% recorded in the third quarter of 2025.

The figures continue the strengthening in yields seen since 2022, driven by a combination of more subdued house price growth and continued demand for privately rented homes.

The increase reflects the balance between property values and rental income.”

Regionally, landlords purchasing or remortgaging property in the East Midlands generated the highest average yield at 8.1%. This was 0.55 percentage points higher than both the previous quarter and the same period last year.

The North East recorded the second-highest average yield at 8.02%, followed by Scotland at 7.95% and the North West at 7.88%.

Greater London continued to generate the lowest average regional yield at 5.79%, although this was 0.23 percentage points higher than in the second quarter and 0.17 percentage points above the corresponding period in 2025.

Property breakdown

By property type, houses in multiple occupation continued to generate the highest average yield at 8.8%. Although this was 0.06 percentage points lower than in the previous quarter, it represented annual growth of 0.37 percentage points. Multi-unit blocks produced the second-highest yield at 7.36%, followed by flats at 6.66% and terraced homes at 6.46%.

Flats recorded the strongest annual growth among the property types analysed, with yields increasing by 0.40 percentage points compared with the third quarter of 2025. Yields on multi-unit blocks rose by 0.34 percentage points over the same period.

Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, (pictured) says: “Buy-to-let yields reaching their highest level since 2011 demonstrates the attractive returns that well-managed rental property can continue to generate.

“The increase reflects the balance between property values and rental income, with more subdued house price growth combining with strong demand for rented homes across many parts of the country.

“The regional figures also show why landlords carefully consider local market conditions when investing. Areas with more affordable property values and sustained tenant demand can offer particularly attractive yields, as we see in the East Midlands and across the north of England.”

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Author: Gemma