Quick answer
Average gross buy-to-let yields reached 7.22% in the third quarter of 2026, the highest since 2011, according to Paragon Bank figures published on 12 October. HMOs yielded the most at 8.80%, and the East Midlands led the regions at 8.10%, while Greater London was lowest at 5.79%. There is no single good yield: it depends on the area, the type of property and your costs, and gross yield is measured before mortgage interest, tax, maintenance and management. For investors who buy and refurbish with a bridge, a stronger yield helps the buy-to-let refinance pass the lender's rent test, which is usually how the bridge is repaid.
What do the latest yield figures show?
Paragon Bank works out yields from its own new mortgage offers, using six-month rolling averages. Gross yield is the annual rent as a percentage of the property's value. As reported by Mortgage Introducer and Property118:
- Average: 7.22% in Q3 2026, up from 7.00% in Q2 and 6.94% a year earlier.
- By property type: HMOs 8.80%, multi-unit blocks 7.36%, flats 6.66%, terraced houses 6.46%, semi-detached 5.75%, bungalows 5.23% and detached houses 4.77%.
- By region: East Midlands 8.10%, North East 8.02%, Scotland 7.95%, North West 7.88%, South West and Wales 7.79% each, East Anglia 7.53%, West Midlands 7.38%, South East 6.58% and Greater London 5.79%.
Flats saw the biggest annual rise of any property type, up 0.40 percentage points. Louisa Sedgwick, managing director of mortgages at Paragon Bank, said the figures demonstrate "the attractive returns that well-managed rental property can continue to generate". Paragon is on our panel; see our Paragon Bank lender profile.
Why are yields rising?
Yield is rent divided by value, so it rises when rents grow faster than prices. Paragon put the rise down to subdued house price growth and continued demand for rented homes. Both show up in other data: our report on house prices stalling covers flat prices in the main indices, and our piece on landlords in autumn 2026 covers rents for new lets rising 2.4% in a year.
Higher yields do not mean higher profits for every landlord. Costs have risen too, including the higher rates of Stamp Duty Land Tax on additional homes, which start at 5% on the first £125,000, and the new rules under the Renters' Rights Act.
What is a good buy-to-let yield?
To work out gross yield, divide the annual rent by the price and multiply by 100. A property bought for £200,000 and let for £1,250 a month (£15,000 a year) has a gross yield of 7.5%. Whether that is good depends on three things:
- The local average. 7.5% would be strong in London, where the average is 5.79%, but below average in the East Midlands at 8.10%.
- The type of property. HMOs yield most, but they cost more to run, need licences and are restricted in many areas. See our HMO Article 4 update and HMO bridging loans.
- Your net return. Take off mortgage interest, letting and management fees, repairs, insurance, voids and tax. Two properties with the same gross yield can give very different net returns.
Buying below market value, or adding value through works, lifts the yield on the money you put in. That is why many investors buy tired property at auction or off-market and refurbish it before letting. See auction finance and light refurbishment finance.
What higher yields mean for a bridge-to-let exit
When you buy with a bridge and plan to keep the property, the bridge is usually repaid by a buy-to-let mortgage. Buy-to-let lenders test the rent against the mortgage payment, so a property with a strong yield is more likely to support the loan you need. Our guide to refinancing a bridging loan onto a mortgage explains the rent tests.
Mortgage rates have moved the other way. Rightmove said on 19 October that the average two-year fixed rate on residential mortgages had risen to 5.55%, from 4.25% before February. If buy-to-let pricing follows, rent tests get harder to pass, so check the refinance at today's rates before you buy.
Some lenders are widening what they offer. Hampshire Trust Bank raised its maximum loan to value on eligible HMO mortgages to 80% for professional landlords on 15 October; see our Hampshire Trust Bank profile. A bridge-to-let agrees the buy-to-let mortgage at the same time as the bridge, and bridge to term finance does the same with a single lender.
What it means for your funding
Strong yields in the Midlands, the North, Scotland and Wales, and on HMOs and blocks, make buying to refurbish and let worth a look, especially where prices are flat. The deal still has to work on net figures and on today's mortgage rates. Run the numbers with our bridging and refinance calculators, agree the exit before you commit, and allow time for the works and letting. We search the market and approach the lenders on our panel whose criteria fit the property and your plans.
Common questions
What is a good buy-to-let yield in the UK?
There is no single figure. The UK average gross yield was 7.22% in Q3 2026, according to Paragon, ranging from 5.79% in London to 8.10% in the East Midlands. Compare a property with local averages and work out the net yield after costs.
What is the average buy-to-let yield in 2026?
Paragon Bank put the average gross buy-to-let yield at 7.22% in the third quarter of 2026, up from 7.00% in the second quarter and the highest since 2011.
Which type of property has the highest rental yield?
HMOs, at an average of 8.80% in Q3 2026, followed by multi-unit blocks at 7.36%. Detached houses had the lowest average yield at 4.77%.
How do you calculate buy-to-let yield?
Gross yield is the annual rent divided by the property's value or price, multiplied by 100. For example, £15,000 a year in rent on a £200,000 property is a gross yield of 7.5%. Net yield takes off running costs first.
This article reports news and published figures as at 19 October 2026. It is for general information only and is not legal, tax or financial advice. Bridge & Build Finance is a commercial finance brokerage service, not a lender. Finance is subject to status, lender criteria, valuation, underwriting and approval.
