UK rental yields rise as house‑price inflation slows

Paragon Bank data show average landlord gross rental yields in the United Kingdom reached 7.02% in Q2 2026, with houses in multiple occupation (HMOs) delivering the highest return at 8.90%. Yield growth varied by region – Scotland posted 7.97%, Wales 8.87% and London fell to 5.58%.

The Office for National Statistics reports that average private rent increased 3.3% year‑on‑year to £1,388 in June, with England up 3.4% to £1,446, Wales 4.9% to £843, Scotland 1.3% to £1,012 and Northern Ireland 2.9% to £877. House‑price inflation slowed to 2.7% YoY in May, with average prices at £271,000. Regional price changes showed the North East at the highest 5.9% increase, while London experienced a 3.7% annual decline for the ninth month. The slowdown is attributed to a base‑effect from earlier stamp‑duty changes, and the Consumer Prices Index fell to 2.6% in June. The upcoming Renters’ Rights Act is expected to influence landlord strategies.