Flats and terraced homes achieved the strongest gross rental yield growth for landlords in 2025, with the Wales and the North East performing the best regionally, Paragon reveals.
The lender’s Q4 buy-to-let (BTL) yields report found that yields on flats finished the year at 6.33%, 0.24% higher than the same point the previous year, with terraced homes 0.23% higher at 6.28%.
Houses in multiple occupation achieved the highest yields at the end of 2025 at 8.61%, up 0.20% on a year previously.
The report also found that regionally yields in Wales grew by 0.74% to 8.83%, followed by the North East, up 0.38% to 8.20%. Yields in Greater London also performed well, increasing 0.30% to 5.78%.
Overall, average yields across the UK finished the year at 6.93%, broadly in line with the same period in 2024 when it was 6.94% and Q3 2025 when it stood at 6.95%.
Following HMOs, multi-unit blocks achieved the second highest yield by property type at 7.32% during Q4 2025, followed by flats and terraced homes.
Regionally, Wales was the highest yielding location, followed by the North West (7.80%), the East Midlands (7.69%) and Yorkshire & Humber (7.68%).
Paragon Bank managing director of mortgages Louisa Sedgwick says: “Yields have performed strongly since summer 2022, when house price growth began to slow and rental inflation accelerated due to the imbalance between supply and demand.”
“While we saw this momentum ease last year as the market normalised, we expect yields to remain stable throughout this year.”
“Although overall yield growth was relatively flat in 2025, certain property types and regions stood out, reflecting varied local market conditions and shifting demand for specific kinds of homes.”
Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by finopulse.
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