“Rental yields are a key measure of the health of lettings businesses, so it’s encouraging to see them hit a 10-year high after rebounding from the low recorded around this time last year,” said Richard Rowntree (pictured), managing director for mortgages at Paragon Bank.

Data compiled by Pegasus Insight, based on a survey of nearly 800 landlords, indicates variation in yields depending on portfolio size and property type.

Landlords with larger portfolios of 11 or more properties reported average yields of 6.9%, as did those holding all their properties within limited company structures. Owners of houses in multiple occupation (HMOs) saw even higher yields, averaging 7.2%.

Rowntree noted that these higher yields are often associated with landlords who take a more strategic approach to property investment.

“Compared to the wider market, higher yields are reported by landlords who have larger portfolios that include HMOs and are held in limited company structures,” he noted. “This suggests that those employing more professional strategies are achieving better outcomes.