Top Performing Rental Areas in England and Wales

As we look back on the rental market performance in England and Wales over the last 12 months, several regions have stood out for their impressive rental yields and growth. Below, we’ll look into some of the best-performing areas, hopefully giving investors and property managers something to think about.

The North East has emerged as the standout region for rental yields over the last 12 months. With an average yield of 8.13%, it has consistently outperformed other areas of the country. Specific locations within the North East have shown particularly strong performance:

• Sunderland: Continuing its trend from previous years, Sunderland has maintained its position as one of the highest-yielding cities in the UK with a rental yield of 8.96%
• Newcastle: This coastal town saw a significant yield increase of 7.45% during 2024 and going into 2025, indicating growing demand and potential.

The region’s affordability, coupled with strong rental demand, has contributed to its top-ranking position in the UK’s rental yield table.

Wales has proven to be a formidable contender in the rental market, with average yields of 6,43%%. Key areas of note include:

• Merthyr Tydfil: This Welsh town saw an impressive yield growth of 7.4%, the highest increase in Wales.
• Blaenau Gwent: With a gross rental yield of 7.58%, it remains one of the top-performing areas in Wales.
• Cardiff: The capital city achieved a remarkable average yield of 6.59%, making it an attractive option for investors.

 The Welsh rental market over the past 12 months has benefited from a combination of relatively affordable property prices and increasing rental demand, particularly in urban centres and university towns.

The North West region has maintained its strong position in the rental market, with average yields of 7.84%. Standout areas include:

• Burnley: This town continued to offer impressive yields, with an average of 8.40%.
• Blackpool: With a gross rental yield of 7.80%, it remains one of the top performers in the region.

The North West’s success can be attributed to its mix of affordable property prices, growing urban centres, and strong student populations in cities like Manchester and Liverpool.

Yorkshire and the Humber has shown significant growth, with average yields reaching 7.54% in the year. Notable areas include:

• Hull: Continuing its strong performance with a gross rental yield of 7.45%.
• York: The historic city saw a rental yield of 5.22%, indicating its growing appeal to renters and investors alike.

The region’s diverse economy, from traditional industries to growing tech sectors, has contributed to its robust rental market performance.

While London has traditionally lagged behind other regions in terms of rental yields, there have been some surprising developments:

Several other areas across England and Wales have shown promising results:

• Nottingham: Saw a rental yield of 6.64%, continuing its trend as a strong performer in the region.
• Ipswich: Experienced an impressive 6.16% rental yield.
• Reading: Also achieved a 5.48% rental yield, standing out in a region that has traditionally seen lower yields.

1. Affordability: Regions with lower property prices, such as the North East and Wales, have naturally lent themselves to higher yields.
2. Urban Regeneration: Many cities, particularly in the North, have undergone significant redevelopment, attracting more renters and investors.
3. Student Population: University towns and cities continue to drive rental demand, supporting high yields in many areas.
4. Economic Growth: Regions experiencing economic expansion, such as the North West, have seen increased rental demand from young professionals.
5. 5. Infrastructure Improvement: Areas benefiting from transport and infrastructure upgrades have become more attractive to renters and investors alike.

As we move into Q2 2025, several trends are likely to shape the rental market:

1. Continued North-South Divide: The gap between yields in the North and South is expected to persist, with northern regions continuing to offer higher returns.

2. Rising Rents: Across the UK, rents are forecasted to rise faster than house prices, potentially leading to improved yields in many areas.

1. Focus on Regional Cities: Investors are likely to continue shifting focus from London to regional cities offering better yields and growth potential.
2. Sustainability Considerations: Areas and properties with strong environmental credentials may see increased demand and potentially higher yields.
3. 5. Technology Hubs: Cities developing strong tech and digital sectors may see increased rental demand and yield growth.

The recent rental market in England and Wales has shown resilience and adaptability, with many areas offering attractive yields for investors. The North East, Wales, and the North West have consistently led the pack, while some surprising developments in London suggest a shifting landscape.

For property managers and investors, the key takeaway is the importance of thorough research and a willingness to look beyond traditional hotspots. While areas like Sunderland, Cardiff, and Burnley continue to offer strong returns, emerging opportunities in cities like York and boroughs of London should not be overlooked.

As we move forward, staying informed about local market conditions, economic developments, and changing renter preferences will be crucial for success in the dynamic UK rental market. The trends observed over recent months could provide insights for strategic decision-making in the years to come, highlighting the ongoing potential of the rental sector across diverse regions of England and Wales.

If you wish to talk about investment opportunities in different areas of the country,  book an appointment with Property Sales and Investment Specialist, Ross Pollard,  on 0117 427 0099 or email him on [email protected].