The average rental yield has remained broadly stable at 6% over the past year, with rents rising but house prices also edging upward. According to Dwelly.

The locations with the highest yielding pockets of the UK remain concentrated in Scotland, Wales and parts of the North, with West Dunbartonshire (9.1%) leading the market. 

Sam Humphreys, Head of M&A at Dwelly, said: “With the Budget confirming yet another tax increase for landlords, identifying markets that offer strong or improving yields is essential, as even small percentage changes to property income tax and dividends can significantly impact overall portfolio performance.

“Our analysis shows that despite rising pressures, there are still many parts of the country delivering exceptional returns, and others where yields have strengthened markedly over the past year.

“For landlords facing a higher tax environment, these areas offer valuable opportunities to help maintain margins as operating costs continue to rise.”

Other strong performers within the top ten strongest rental markets include Greater Glasgow (7.8%), Renfrewshire/Inverclyde (7.0%), Merthyr Tydfil (6.6%), Newcastle upon Tyne (6.6%), Portsmouth (6.5%), North Lanarkshire (6.4%), Dundee and Angus (6.3%), Southampton (6.3%) and Manchester (6.2%).