UK Rental yields at their highest since 2011
North East England recorded an average gross rental yield of 8.02% in the third quarter of 2026, according to Paragon Bank. The region was joint second with Yorkshire and Humber, just behind the East Midlands at 8.10% and above Paragon's overall average of 7.22%.1
Source: Paragon Bank, Q3 2026 rental yields data.
Across the UK, average gross yields reached their highest level since the first quarter of 2011. For Find UK Property clients interested in affordable regional property, the North East figures show how the purchase price of a home can affect the rental income it produces relative to its value.
1.How rental yields have changed
Paragon's overall average rose from 7.00% in the previous quarter to 7.22%. A year earlier, it stood at 6.94%, giving an increase of 0.28 percentage points over 12 months. The bank says yields have been strengthening since 2022, helped by subdued property price growth and continued demand for privately rented homes.1
The two biggest and most obvious effects of the Renters' Rights Act, which many of us in the industry predicted ahead of time, were reduced supply in the market from smaller landlords exiting the space, and the increase in landlord costs being passed on to tenants.
Both of these push the rents up and this will continue.
2.Regional rental yields
The North West also recorded a strong average yield of 7.88%. Further south, the South East averaged 6.58%, while Greater London had the lowest regional figure at 5.79%. The chart shows the full regional breakdown.1
3.How the North East compares
The North East's average was 0.80 percentage points above Paragon's overall figure and more than two percentage points higher than Greater London's. That gap matters to buyers comparing how much rental income a property could produce for the amount invested.
These are regional averages, so an individual North East property may perform differently. Its purchase price, rent, property type and location all affect the yield, while occupancy and running costs affect the income an owner receives.
4.Why purchase price matters
Rental yield expresses annual rental income as a percentage of a property's value. A property with a lower price can therefore produce a higher yield than a more expensive home, even if its rent is lower. The relationship between the two figures matters when comparing properties.
Paragon points to affordable property values and sustained tenant demand when explaining the yields recorded across northern England. In the North East, lower purchase prices can allow rental income to represent a larger share of the property's value than in more expensive markets.1
For investors who want regular income, lower purchase prices can make regional property attractive. Buyers still need to assess the expected rent and prospects for capital growth before deciding whether a home suits their budget and income requirements.
Yield by property type
Source: Paragon Bank, Q3 2026 rental yields data.
Property type also makes a difference. Paragon reported an average yield of 8.80% for houses in multiple occupation, followed by 7.36% for multi-unit blocks. Flats averaged 6.66% and terraced houses 6.46%. Those differences are a reason to compare similar properties when assessing an investment, rather than relying on a regional average alone.1
5.Why this is good for Find UK Property clients
Find UK Property focuses on affordable investment property in regional areas. The North East results support the case for looking at locations where rents compare favourably with purchase prices. For clients buying for long-term rental income, the focus is on what a property costs and what it can earn in rent.1
A lower acquisition price can make entry into the UK property market more accessible. This is particularly relevant to overseas investors comparing regional homes with the higher prices found in London and parts of southern England. Where tenant demand remains strong, an affordable purchase price can also support a higher gross yield.
Clients still need to distinguish the published yield from the income they will retain. Paragon calculates gross rental yield by dividing annual rent by property value. The figures use six-month rolling averages drawn from Paragon's property lending data.1
The figures exclude finance costs, management fees, maintenance, taxation, void periods and other expenses. An 8.02% gross yield therefore cannot be treated as an 8.02% net return. Clients should assess the costs of the individual property and their own circumstances when working out the likely income.
For Find UK Property clients, the benefit is the opportunity to buy at a comparatively affordable price in a region with strong gross rental yields. Checking the expected rent and full costs of each property helps establish whether it will meet the client's income needs.
