Although the data comparing between Q2 2022 and Q2 2021 shows a slight fall in annual rental yields across the country – down from 6.1% a year ago to 5.5% – the drop is only 0.2% from Q1 2022, when the yield was 5.7%.

Every region in England and Wales saw a drop in yields of between 0.1% and 0.9% from last year.

However, a recent quarterly comparison from Q1 2022 shows that rental yields have increased in Wales and the East Midlands, while the North West, West Midlands and the South West haven’t seen any changes in yields.

The remaining five regions have seen minimal drops, with all showing falls of 0.6% and below.

The three northern regions – the North East, Yorkshire & Humberside and the North West – continued to see the highest levels of rental yields.

Meanwhile, the North East of England has the top rental yield regional figure for the eighth consecutive quarter, although it did fall slightly from 8.7% in the last quarter to 8.3% now.

•   FP Show 2021: The drive to boost EPC ratings will offer 'massive opportunity' for BTL brokers
•   Buying BTL properties through limited companies increases in popularity among landlords
•   MT Finance appoints head of BTL lending

Fleet Mortgages said that although rental yields have dropped from the highs of the past 12 months, strong tenant demand and a relatively low level of supply were likely to keep yields at good levels.

Steve Cox, chief commercial officer at Fleet Mortgages, said: “This is, without doubt, a very interesting period for landlords, lenders, and the wider private rental sector, as we seek to marry up a number of ongoing issues which are all having an impact.

He added the good news is that as their rental barometer shows, yields are holding up well, and although they have witnessed a sag since last year’s peaks, most regions have generally been consistent on a quarterly basis.

“Overall, for existing landlords, the rental yield figures remain a strong source of comfort, and while we believe the level of demand for PRS properties will dip, there is likely to still be enough – especially compared to property choice – to ensure they maintain good levels throughout the rest of 2022,” said Steve.