Rental growth across England and Wales reached 6.1% in the final quarter of 2019, a figure up from the 5.4% growth achieved in the last quarter of 2018, Fleet Mortgages reported.

Fleet revealed the new figures in the launch of its new Quarterly Buy-to-Let Index – which features a rental barometer analysing regional yields across England and Wales.

The Index reported that the North of England recorded the top rental yield regional figure for the quarter, which increased by 2.6% year-on-year to 9.1%.

The buy-to-let (BTL) lender’s first iteration of the Index was comparing the final quarter of 2019 with the same period a year earlier.

Only one region, the North-West, showed a slight drop in rental yield over the period – down to 7.4% from 7.5% – while Fleet also reported that yield figures for the South-West had remained unchanged.

“In this context, it is perhaps not surprising to see those regions further North in the country posting the largest increases and outstripping the gains seen by properties in the South,” Fleet distribution director, Steve Cox, commented.

“Landlords now tend to look differently at their properties, with many converting single-tenancy properties into multi-tenant ones in order to secure better yields. These higher yields are needed in order meet those growing tax liabilities, but to also offset the increased cost of acquiring tenants and regulation.

“Coupled with a much greater inclination to purchase further afield – in those very regions showing greater rental yield increases – we can see why certain regions continue to outperform others. However, with an overall squeeze on supply, coupled with a continued demand for quality properties by tenants, our view is that we are likely to see continued rental increases across the vast majority of regions, if not all, during 2020.

“In that sense, property investment will remain increasingly popular, and we fully anticipate that all types of landlords will seek to add to portfolios over the course of the next 12 months.”

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