South West England has recorded the strongest annual growth in rental yields across the UK, according to the latest Q2 Buy-to-Let Yield Report from Paragon Bank.
Yields in the region rose from 7.27% to 8.06% between Q2 2024 and Q2 2025, representing an increase of 0.79 percentage points — the highest of all UK regions.
The report points to strong performance in cities such as Plymouth and Taunton as key drivers. Plymouth topped Paragon’s yield rankings at city level with average returns of 9.51%, while Taunton placed 14th with 8.36%.
Plymouth’s PL4 postcode was also identified as the second most active area for buy-to-let purchases in the past year, just behind Cardiff’s CF24.
The East Midlands followed closely behind the South West, with average yields increasing by 0.77 percentage points to 7.48%.
East Anglia and the West Midlands also saw notable rises, with growth of 0.67 and 0.52 percentage points respectively.
Scotland was the only region to record a decline in yields, slipping from 7.56% to 7.48%.
Across all regions in England, Scotland and Wales, average yields rose from 6.70% to 7.11% over the year.
Wales continued to deliver the highest yields at 8.59%, followed by the South West and North West at 8.06% and 7.92% respectively. Greater London remained the lowest yielding region at 5.73%.
Louisa Sedgwick, managing director of mortgages at Paragon Bank, said: “It’s encouraging to see that most regions across England, Scotland and Wales have seen a steady increase in the average yields over the past year.
“Additionally, potential returns remain near the record high level we reported earlier in the year.
“A key component of this is the continued demand for rented property. Alongside long-term capital gains, this illustrates the enduring appeal of buy-to-let investment.”
She added: “It is important to note, however, that while yields offer a useful snapshot of the regular income landlords can expect, a full understanding of an investment property’s returns also requires considering factors such as financing methods, capital appreciation, the initial deposit, and any enhancements made to the property.”
