Buy to Let Yields Just Hit a 15 Year High. Here's What It Means for London
Rental returns across the UK have climbed to their highest level since 2011. So what does that mean for London landlords, sellers and buyers? We've broken down the latest figures and what they could mean for your next move.
If you own a rental property, or you've been thinking about buying one, this is a bit of news worth reading over your morning coffee.
Average gross buy to let yields across the UK have reached 7.22%, their highest level since early 2011. The figures come from Paragon Bank's Q3 2026 Buy to Let Yields report, which is based on the bank's own mortgage offer data for landlords buying or remortgaging property.
That's up from 7.00% in the second quarter of this year and 6.94% this time last year. It also continues a steady climb that started back in 2022.
So what's behind it?
A yield is simply your annual rent shown as a percentage of what your property is worth. When rents hold firm and prices settle, that percentage goes up.
That's exactly what's been happening. Paragon points to two things working together: house price growth has been more gentle, while demand from people looking to rent has stayed strong. Put those together and landlords are getting more rent for every pound their property is worth.
And what about London?
We'll be straight with you on this one. Greater London still has the lowest average yield of any region, at 5.79%. That's nothing new. Property here costs more to buy, so the rent works out as a smaller percentage of the value.
But the direction is encouraging. London yields rose by 0.23 percentage points over the quarter and by 0.17 percentage points over the year. Returns in the capital are improving, not slipping.
It's also worth remembering what a yield doesn't tell you. It's a snapshot of rent against value, nothing more. It doesn't reflect the long term value many London owners are looking for alongside their rental income, and it doesn't reflect demand on the ground. In our experience across Central London and Dulwich, a well presented, fairly priced home still attracts strong interest from tenants.
The bigger picture across the UK
Outside the capital, the strongest returns are in areas where property is more affordable and tenant demand is steady:
• East Midlands: 8.10%
• North East: 8.02%
• Scotland: 7.95%
• North West: 7.88%
The East Midlands saw a particularly big jump, up 0.55 percentage points on both the previous quarter and the same period last year.
Flats are having a good year
This is the part we think London landlords will find most interesting.
By property type, houses in multiple occupation still lead the way with an average yield of 8.80%. But flats recorded the biggest annual growth of any property type, with yields rising 0.40 percentage points to 6.66%.
So much of Central London's rental market is made up of flats, so this is a really positive sign for many of the landlords we work with.
What this means for you
If you're a landlord
Now is a great moment to check in on how your property is performing. Is your rent in line with the market? Has your property's value changed? Paragon's own view is that well managed rental property continues to deliver attractive returns, and that's something we see every day. Just keep in mind these figures are gross yields, so your actual return will depend on your mortgage, running costs and how the property is looked after.
If you're selling
Investor confidence matters when you're looking for a buyer. Improving returns can encourage landlords to grow their portfolios, and that adds another group of motivated buyers to the market, especially for flats.
If you're buying
These numbers are encouraging, but every property is different. Look closely at the rent the property could realistically achieve, your borrowing costs and the responsibilities that come with letting today, as the rules around renting have changed a lot this year. A little homework at the start makes for a much better investment.
Let's talk numbers
Whether you'd like a fresh rental valuation, a sales appraisal or a chat about where your property sits in today's market, our team is here to help. We know our neighbourhoods inside out and we'll always give you an honest picture.
Give us a call or drop us an email. We'd love to hear from you.
Kind Regards
Megan Cutforth
Greater London Properties
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