Flats and terraced houses recorded the strongest growth in gross rental yields in 2025, with Wales and the North East outperforming the rest of the UK, according to a major bank’s latest Buy-to-Let Yield Report.

Yields on flats finished the year at 6.33%, an increase of 0.24 percentage points on 2024.

Terraced homes also saw solid gains, rising 0.23 points to reach 6.28%.

Houses in multiple occupation (HMOs) continued to deliver the highest returns overall, climbing 0.20 points to 8.61%.

Wales led regional performance, with yields jumping 0.74 points to 8.83%, while the North East followed with a 0.38-point rise to 8.20%.

Greater London also posted growth, with yields rising to 5.78% — an increase of 0.30 percentage points.

Across the UK, average yields ended the year at 6.93%, broadly in line with both 2024 and the third quarter of 2025.

Multi-unit blocks (MUBs) delivered the second-highest returns by property type, reaching 7.32% in the final quarter, ahead of flats and terraced homes.

Wales led the regional rankings, while the North West followed at 7.80%, the East Midlands at 7.69% and Yorkshire & Humber at 7.68%.

A spokesperson for the bank, said: “Yields have performed strongly since summer 2022, when house price growth began to slow and rental inflation accelerated due to the imbalance between supply and demand. 

“While we saw this momentum ease last year as the market normalised, we expect yields to remain stable throughout this year.

“Although overall yield growth was relatively flat in 2025, certain property types and regions stood out, reflecting varied local market conditions and shifting demand for specific kinds of homes.”