New data from letting agent Lomond reveals that Merthyr Tydfil, Brent, and Hammersmith and Fulham are leading the pack. These areas have seen rental yields jump by a healthy margin over the past year:

• Merthyr Tydfil: Rental yields have climbed by 1.4%.
• Brent: Yields have increased by 1.3%.
• Hammersmith and Fulham: Yields have risen by 1.2%.

Other areas with strong gains:

• Westminster: 1.2% increase in rental yields.
• Reading, Folkestone and Hythe, and Salford: 0.8% increase in yields.

Not just a few hot spots:

The good news is that every region of England and Wales has witnessed positive growth in rental yields. This is because rents are rising faster than house prices, making the buy-to-let market even more appealing.

London leads the charge:

London saw the biggest jump in average rental yield, increasing by 0.4%. The South East and North West followed closely behind, each seeing a 0.3% increase.

The North East reigns supreme:

While London is a powerhouse, the North East boasts the strongest overall rental yield, clocking in at a healthy 4.9%.

What’s driving this rental boom?

John Ennis, Chief Revenue Officer at Lomond, explains: “The property market has been remarkably resilient, with house prices holding strong despite the recent rise in mortgage rates. Now, with the Bank of England cutting rates, we’re seeing a surge in optimism from both buyers and sellers.”

“But it’s the rental market that’s truly taking off. There are many areas where house prices have barely budged, but rental values have skyrocketed. This is creating an exciting opportunity for buy-to-let investors, who are finding attractive yields in markets they may have previously overlooked.”

The takeaway:

This data paints a clear picture: the buy-to-let market is thriving, with strong rental growth creating opportunities for smart investors. Whether you’re considering adding to your existing portfolio or just starting out, these areas are worth a closer look.