The total average rental yield for England and Wales is 7.2% for Q3 this year, Fleet Mortgages buy-to-let (BTL) rental barometer reveals.
The latest figure shows an increase of 0.3% on the same quarter last year but is down 0.4% on a quarterly basis.
The lender says this is down to a stabilisation of rental levels in most areas of the country after a long period when rents continued to rise significantly.
Of the 10 regions, only the East Midlands maintained its rental yield figure of 7.5% from the previous quarter, while Yorkshire & Humberside was up slightly by 0.1%, all others saw a dip.
The North East continues to lead the average rental yield table at 9.7% with the North West at 8% in second place. Both regions held the same position from the previous barometer.
Meanwhile, Yorkshire & Humberside moves up to third place from fifth, the East Midlands moves up to fifth from sixth, while Wales drops to sixth from third.
Greater London is not alone at the bottom of the rental yield table for the first time with East Anglia’s average yield of 5.9% while the South West and South East have 6.1%.
When it comes to average monthly rent per property, the highest remains in Greater London, up from £2,024 to £2,134, followed by the South East at £1,572.
North East regional properties continue to remain the most affordable, with the monthly price of an average property falling quarter-on-quarter from £768 to £702.
Fleet said the maintenance of strong rental yields continued to be a positive for landlord borrowers, particularly against a backdrop of falling mortgage rates.
Fleet Mortgage chief commercial officer Steve Cox says: “As can be seen from this latest iteration of the Rental Barometer, yearly rental yields across every single region we lend within have all increased, albeit as expected, by smaller amounts and at slower rates, suggesting we are now past the point of the significant increases in rents we saw during the previous 12-18 months.”
“It’s our belief that the demand-supply disparity is not as acute as it was previously, however many landlord borrowers are waiting to see what the Budget holds for them, and whether any further increase in taxation or costs are going to need to be faced, and paid for.”
“Regionally, it is those in the North of the country that continue to top our Rental Yield table but we have seen a shrinkage in the difference between North and South and while regions such as Greater London and the South East continue to show an uplift in their average monthly rent per property, in the North East, for example, this has actually dropped from the last quarter.”
