The buy-to-let sector has faced turbulence recently – from rising mortgage costs to regulatory changes. Yet, despite these challenges, many landlords choose to remain in the market. The reason? Rental yields are climbing to attractive levels, offering compelling returns for savvy investors.

What’s Fueling the Yield Growth?
Three powerful market forces are reshaping landlord calculations:

1. Record Rent Growth – UK rents have jumped 9.2% year-on-year (HomeLet 2025), with many cities seeing double-digit increases as demand far outstrips supply
2. Regional Price Adjustments – While London prices remain high, areas like the North West offer average yields of 7.3% due to more affordable purchase prices
3. Stabilizing Tax Landscape – With mortgage interest tax relief changes now fully implemented, landlords have greater certainty for financial planning

The UK’s Yield Hotspots
– North West England (7.3%) – The current yield champion, combining strong tenant demand with reasonable property prices
– Midlands (6.5%) – Consistently solid returns with good growth potential
– London (4.5%) – Lower yields offset by long-term capital appreciation opportunities

Landlord Decision Time: Stay or Exit?
✅ Stay if you:
– Own properties in high-yield regions
– Have adapted to the new tax environment
– Can absorb higher mortgage costs

❌ Consider selling if you:
– Hold underperforming properties
– Are overleveraged in the current rate climate
– Lack capacity to handle regulatory changes

The Road Ahead for Buy-to-Let
With rental demand showing no signs of weakening and yields improving, the market rewards strategic landlords. Those who carefully select locations, manage costs effectively, and stay informed can still build profitable portfolios.

While the golden age of easy buy-to-let returns may be over, today’s market offers genuine opportunities for landlords willing to work smarter.

Market data sources: HomeLet, PropertyWire, UK Finance