Flats and terraced homes achieved the strongest gross rental yield growth for landlords in 2025.

And Wales and the North East performed the best regionally, data from buy to let mortgage specialist Paragon Bank has found.

Yields on flats finished the year at 6.33%, 0.24 percentage points (pp) higher than the same point the previous year.

Terraced homes were 0.23pp higher at 6.28%. 

Houses in Multiple Occupation achieved the highest yields at the end of 2025 at 8.61%, up 0.20pp on a year previously.

Paragon’s Q4 2025 Buy-to-Let Yields report, based on the bank’s lending data, found that regionally yields in Wales grew by 0.74pp to 8.83%.

This was followed by the North East, up 0.38pp to 8.20%. 

Yields in Greater London also performed well, increasing 0.30pp to 5.78%.

Overall, average yields across the UK finished the year at 6.93%, broadly in line with the same period in 2024 (6.94%) and Q3 2025 (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%).

Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, 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.”