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The UK inventory market exhibits no indicators of weakening because the FTSE 100 continues to climb increased, coming inside just a few share factors of 9,000. In the meantime, the pound has grown stronger in opposition to the greenback, rising 2% up to now month.
Sometimes, a rallying inventory market results in falling yields as the 2 components transfer inversely.
Nevertheless, many top-performing FTSE dividend shares have maintained their excessive yields by growing dividends. The insurance coverage and property sectors are nonetheless two of the most effective locations to search for high-yield UK shares. Shares like Phoenix Group, M&G, and Taylor Wimpey all preserve yields above 8%, regardless of having fun with 8% to 10% good points up to now month.
However that’s not the one place the place traders can discover the most effective UK dividend shares to purchase in 2025. I’m extra within the potential of two smaller FTSE 250 dividend shares that I personal. OSB Group (LSE: OSB) and Main Well being Properties (LSE: PHP) are two of my favorite UK passive revenue shares and I believe dividend-focused traders could be sensible to think about them.
OSB Group
Barclays just lately minimize its worth goal for OSB Group to 635p from 650p. Nevertheless, it maintains an Obese score on the inventory, with the goal representing roughly a 50% achieve.
The Kent-based challenger financial institution has a 7.7% yield, ramping up dividends at a fee of 16.4% over the previous 5 years. For 2023, whole dividends amounted to 32p per share, a determine that appears prone to improve for 2024.
Current worth exercise has been muted, with the shares down 1.12% up to now 12 months. The subdued progress displays weaker efficiency, with earnings per share (EPS) falling from £1 per share to 75p in 2023. EPS for 2024 is predicted to return in at 82p when full-year outcomes are posted on 13 March 2025.
Total, analysts stay optimistic in regards to the inventory. 9 out of 11 have a Robust Purchase score with a median 12-month worth goal of 553p — a 30% achieve.
Main Well being Properties
Like OSB Group, Main Well being Properties has been buying and selling sideways, with the share worth down 0.7% up to now 12 months. The actual property funding belief (REIT) focuses on shopping for and letting healthcare premises like hospitals and docs’ places of work.
REITs are typically fashionable UK shares with these on the lookout for excessive yields as the foundations require them to return 90% of earnings to shareholders as dividends.
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Labour’s sweeping finances reforms final October hit the REIT market laborious, with costs falling throughout the board. However after hitting a five-year low of 86p final month, Main Well being took a shock flip, gaining 7.3%. Nevertheless it nonetheless has an extended solution to go to regain its five-year excessive of 168p.
Rates of interest have been a key issue within the weakened efficiency, as the corporate depends on debt financing to fund property acquisitions. Current fee cuts might have helped shore up the share worth however it’s not within the clear but. If the Financial institution of England’s fee minimize plans don’t work as hoped, issues might take a downward flip once more.
Nonetheless, I believe the FTSE 250 dividend inventory, with its 7.6% yield and 20+ years of strong dividend progress, is likely one of the finest for 2025.
