Wales delivered a gross buy-to-let yield of 8.74% in the first quarter of 2026, the highest in the UK. The North East followed at 8.10%, the North West at 7.87%. Greater London sat at the bottom of the table at 5.74%. Read across the regions and the gap between the best and worst is now three full percentage points, and the geography of where UK landlords are making money has shifted decisively north.
The National Picture
Paragon Bank’s Q1 2026 lending data put national gross BTL yields at 6.96%, up from 6.92% at the end of 2025. A modest move on the headline, but it masks bigger regional shifts underneath.
The drivers are familiar but worth restating. Rental supply across the UK remains around 23% below pre-pandemic levels, according to Zoopla’s March 2026 report, which keeps upward pressure on rents. Demand is softer than it was, Zoopla flagged it at a six-year low, but the supply shortage is doing the heavy lifting. Rents are rising faster than house prices in most regions, and yields are firming as a result.
The Q1 2026 Regional Ranking
| RANK | REGION | GROSS YIELD Q1 2026 |
| 1 | Wales | 8.74% |
| 2 | North East | 8.10% |
| 3 | North West | 7.87% |
| 4 | East Midlands | 7.58% |
| 5 | Yorkshire & the Humber | 7.45% |
| – | UK average | 6.96% |
| Bottom | Greater London | 5.74% |
The pattern is consistent with the previous quarter (Wales and the North East have held the top of the table for several years now), but the year-on-year direction is what matters for anyone deciding where to deploy capital next.
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How the Regions Have Moved Over the Last Year
Run Paragon’s Q4 2024 readings against Q4 2025 and the year-on-year shifts come into focus:
- Wales gained around 0.74 percentage points across 2025 (roughly 8.09% to 8.83% Q4-over-Q4) before settling at 8.74% in Q1 2026.
- The North East added about 0.38 percentage points, finishing 2025 at 8.20% before easing to 8.10% in Q1.
- The North West was broadly flat through 2025 (-0.05 percentage points), then ticked up to 7.87% in Q1 2026, the only top-five region that gained quarter on quarter.
- Greater London added 0.30 percentage points across 2025, ending at 5.78% Q4 and 5.74% Q1.
The net of all that: yields have firmed across most of the UK, but the rate of improvement has been highest in the regions that were already strongest. The geography is widening, not narrowing.
What Rental Growth Is Doing Underneath
Zoopla’s March 2026 rental market report breaks regional rent growth out cleanly:
- North East: rents up 4.5% year-on-year, the fastest in the UK
- North West: 3.2%
- London: 1.6%
- West Midlands: 1.7%
- Scotland: 1.7%
Hamptons’ Spring 2026 Market Insight tells the other half of the story: where landlords are actually buying. In the North West, landlords accounted for 25.3% of buyers so far in 2026; the North East 23.8%; Yorkshire and the Humber 11.9%. The share of landlord purchases in the North West more than doubled between 2025 and 2026. Investor capital is following the yield map.
In the South of England, by contrast, buy-to-let activity has been broadly flat. Homes sold by landlords there are increasingly going to first-time buyers and owner-occupiers.
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Property Type Matters as Much as Region
A region is a starting point, not a strategy. Within the Paragon Q1 2026 data, the property-type breakdown matters:
- Houses in multiple occupation (HMOs): 8.78% average gross yield, up 0.17 percentage points in the quarter, the highest-yielding property type on the platform.
- Multi-unit blocks: 7.48%, up 0.21 percentage points, the strongest quarterly mover.
- Single-let houses and flats: yields below the regional averages above, with detached houses softest.
An HMO in the North East is doing a different job to a detached family home in Greater London. Both are buy-to-let; they’re materially different investments.
Gross Is Not Net: What Eats Into the Headline Number
The numbers above are gross yields. Net yields land lower once you subtract:
- Mortgage interest (now non-deductible against rental income for individual landlords, post-2017 changes phased in by 2020)
- Letting agent fees, void periods, repairs and management
- Service charges and ground rent (on leasehold)
- Compliance costs: the Renters’ Rights Act, which became law in 2025, has added cost and process complexity for landlords. Hamptons noted some landlords selling ahead of the changes.
- EPC requirements: the proposed Minimum Energy Efficiency Standard uplift would require rental property at EPC C by 2028, which will mean retrofitting costs on older stock.
The rule of thumb worth carrying: net yields typically run 1.5 to 3 percentage points below gross. A region showing 8.7% gross is delivering something closer to 6-7% net to a sensibly-financed landlord; a region at 5.7% gross is closer to 3-4% net, which is competitive with gilts but not by a wide margin.
What to Watch for the Rest of 2026
Zoopla expects rents on new lets to rise by 2.5% over 2026, slower than 2025’s pace but still above general inflation. Paragon’s Louisa Sedgwick framed the Q1 picture as a positive footing, with yields edging up against a slightly flat housing market and tenant demand that is still strong despite the year’s softening.
The watch-list for the next few quarters:
- Whether the North West continues to gain, given the surge in landlord buyer share
- How the Renters’ Rights Act beds in through 2026, with early signs of some landlord selling, which may keep supply tight and rents firm
- What the EPC uplift does to net yields on older stock once the 2028 deadline gets closer
- The London floor: at 5.74% gross, London is now less competitive with gilts on a net basis; whether that pulls investor capital out, or pulls prices down enough to reset the yield, will shape the southern market
Where the Opportunity Sits
For investors targeting yield, the data is unambiguous: the Welsh and Northern regions are doing the work. Investment Oracle is currently hosting new-build opportunities in the North West (3-bedroom freehold family homes from £225,000 in Blackburn, with advertised net yields over 6%) and completed short-term-let apartments in Devon (from £136,000, advertised up to 10% on short-let). Both sit in the high-yield end of the regional table, see the related reading below.
Curious how opportunities like this fit into a bigger picture? Explore current opportunities with Investment Oracle →