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14/7/25 8:13 pm
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Wales has cemented its position as the top yielding landlord location in the UK during the third quarter of the year.
Paragon Bank’s Rental Yield Report reveals that landlords in the country achieved an average gross yield of 8.8% at the end of September, compared to 8.5% in the second quarter. Yields in Wales have risen since the first quarter of 2023, when they stood at 7.1%.
Yields in the North East also strengthened during the quarter, finishing at 8.1%, while the North West, South West and the Yorkshire and Humber all achieved 7.8%. Landlords in Greater London generated the lowest yields at 5.6%, followed by the South East at 6.4%.
Paragon Bank reports that student property yields continued to outperform non-student property. Landlords with property in student postcodes generated an average yield of 7.3%, up from 7.1% at the start of the 2024/25 academic year, compared to 6.6% in non-student postcodes.
By property type, yields for HMOs firmed up during the quarter to 8.48% while terraced property and flats achieved 6.2%.
Overall, yields eased slightly from the 14-year high of 7.1% recorded during the second quarter of the year to 6.9% at the end of the third quarter.
Louisa Sedgwick, managing director of mortgages, says regions with lower average property values and sustained high levels of tenant demand are typically generating higher yields. “We see this clearly across northern England and Wales and that is reflected in landlord demand for new properties in those locations.”
She adds: “Student property has always been popular with landlords and that is reflected in both higher yields generated in known student postcodes and HMO properties that typically house students from their second year onwards. We expect this to continue to be the case despite uncertainty over university funding, particularly driven by domestic students.”
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