Property Passport UK

Rental Yield Calculator 2026

Calculate gross yield, net yield, and return on investment for any UK buy-to-let property. Switch to Detailed mode to include mortgage interest, letting agent fees, void periods, insurance, maintenance, service charges, and ground rent.

Rental Yield Calculator

£
£
£
%

Gross yield

6.00%

Good

Annual gross rent

£12,000

ROI (incl. purchase costs)

3.90%

Switch to Detailed mode to include mortgage interest, agent fees, void periods, and other running costs for a more accurate net yield.

This is an estimate for indicative purposes only. It does not constitute financial or tax advice. Consult a qualified adviser for your specific circumstances.

How to calculate rental yield in the UK

Rental yield measures the annual return on a buy-to-let investment, expressed as a percentage of the property value. It is the primary metric used by property investors to compare opportunities and assess whether a purchase makes financial sense.

Gross yield = (Annual rent ÷ Property value) × 100. This is the headline figure you will see advertised, but it ignores all running costs.

Net yield = ((Annual rent − Annual costs) ÷ Property value) × 100. This is the figure that matters — it reflects actual income after paying all expenses.

ROI (Return on investment) divides net annual income by the total amount invested including purchase costs (stamp duty, legal fees, survey), giving a true picture of cash-on-cash return.

Yield ratings explained

Gross yieldRatingTypical UK locations
Below 4%LowPrime London, South East
4–6%AverageMost UK cities
6–8%GoodNorthern cities, student towns
Above 8%ExcellentHMO properties, some northern towns

Frequently asked questions

What is a good rental yield in the UK?
A gross rental yield of 5–7% is generally considered good for UK buy-to-let in 2026. Yields vary significantly by region: northern cities like Manchester, Liverpool, and Leeds often achieve 6–8%, while London and the South East typically yield 3–5% due to higher property prices. Net yield — after all costs — is the more meaningful figure for assessing profitability.
What is the difference between gross and net yield?
Gross yield is simply annual rent divided by property value, expressed as a percentage. Net yield deducts all running costs — mortgage interest, letting agent fees, insurance, maintenance, service charges, and void periods — from the annual rent before dividing by property value. Net yield gives a much more accurate picture of the income you will actually receive.
How do void periods affect rental yield?
Every week a property sits empty represents roughly 1.9% of annual rental income (1/52 weeks). Two void weeks per year reduces gross income by around 3.8%. In a worst-case scenario of 4 void weeks, you lose over 7% of annual rent. Factoring in realistic void periods is essential for an accurate net yield calculation.
Does mortgage interest affect rental yield?
Yes — mortgage interest is typically the single largest cost for a leveraged buy-to-let. Since Section 24 (Finance Act 2015) was phased in fully by 2020, landlords can no longer deduct mortgage interest as an expense when calculating taxable rental profit. Instead, you receive a tax credit equivalent to 20% (basic rate) of the interest paid. Higher-rate taxpayers are therefore significantly worse off, which directly affects after-tax yield.
What other costs reduce rental yield?
Common costs that reduce rental yield include: letting agent fees (typically 8–15% of rent for full management), buildings and contents insurance (£400–£1,200/year), maintenance and repairs (budget 1–2% of property value per year), service charges and ground rent on leasehold properties, HMO licensing fees where applicable, and accountancy fees. Using the Detailed mode in this calculator lets you enter each cost individually for the most accurate net yield figure.

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