Landlords achieve their strongest rental yields in over ten years
November 25, 2025
New data from a major mortgage lender shows that landlords across the UK are now securing some of the strongest rental yields seen in more than ten years. Aldermore Bank reports that the typical yield has climbed to 6.6 percent, up from 5.9 percent the year before. This is the highest level recorded since 2014. The research, based on a survey of 872 landlords, also shows that almost nine in ten are now generating a profit from their portfolios, marking the strongest position since before the pandemic.
Regional trends
Several regions continue to attract investors due to a mix of reasonable house prices and strong, steady rental demand. Yorkshire and the Humber stands out as one of the top performing regions, not only with average yields near 7.2 percent, but also by leading the list for capital appreciation. This blend of high income and long term growth keeps the region firmly at the top of many investors’ lists.
Further south, returns have been improving, with rent growth and slower buying activity helping southern markets close the gap on rental yields. Even so, the south still lags significantly behind on capital appreciation, which remains one of the most important elements of any long term property investment strategy. The slower pace of growth often reduces the total performance of southern portfolios compared to regions with faster appreciation.
HMO properties remain the strongest performers
Despite wider market changes, HMO properties continue to outperform every other residential investment type. They remain the most profitable and the most popular choice for investors who want strong cashflow and consistent tenant demand. HMOs consistently deliver higher yields than single buy to lets, and they offer far better utilisation of space and income per square foot. Investors looking for high performing opportunities can explore available HMO stock at www.footforwardproperties.co.uk/hmo-for-sale.
Strong performance during change
These improved yields come as the Renters’ Rights Bill becomes law and the government signals that tax adjustments may appear in the next Budget. Even with these shifts, Aldermore’s data shows that most landlords are navigating the changes with clear resilience.
Jon Cooper, Aldermore’s director of mortgages, pointed out that the findings show a compelling contrast. Profits and yields are at their strongest since before the pandemic, yet many landlords remain cautious about the impact of upcoming reforms.
Even so, rental performance continues to hold firm. A shortage of available homes and a stable labour market keep demand strong and void periods low.
Growing confidence
This stability is now feeding into confidence across the sector. More landlords rate current conditions as healthy than at any time since 2020. Many plan to retain their investments or expand their portfolios, and many expect rents to continue rising, which helps counterbalance higher lending costs.
Cooper also highlighted that new legislation could lead to long term improvements. Better property standards, clearer expectations and stronger communication may support longer tenancies, fewer arrears and more stable values.
A sector that adapts
Aldermore’s findings underline how the private rented sector continues to adjust and strengthen despite recent challenges. Investors who stay focused on quality housing, reliable management and strong long term strategy are now seeing some of the best returns in over a decade.
Although questions remain around future tax policy, the overall trend remains clear. Well located, well managed homes continue to deliver reliable income, and in the strongest regions, very strong capital growth too. HMOs in particular continue to lead the market for profitability, popularity and performance.