Rental Yield Calculator UK
Model: gross yield = annual rent ÷ price. Net yield = (annual rent − annual costs) ÷ price. The figures are before income tax on the rent and before any capital growth or fall in the property’s value. This calculator is not investment advice.
Gross yield vs net yield
Gross yield is simple: annual rent divided by the property price, as a percentage. On a £200,000 property at £1,000 a month, that is £12,000 ÷ £200,000 = 6.0%. It is useful for a quick comparison between areas, but it flatters the deal because it ignores every cost. Net yield subtracts the annual costs first: (£12,000 − £3,600) ÷ £200,000 = 4.2%. That is the figure to compare with other investments, and it is the figure that decides whether the property actually makes money month to month. A property with a high gross yield and high costs can be worse than a property with a lower gross yield and low costs.
Two costs are often missed. The first is voids — months with no tenant. One empty month a year on a £1,000-a-month property costs £1,000, which cuts the net yield by half a percentage point on a £200,000 property. The calculator has a void cost input: put in a realistic figure, such as one month’s rent if the area has high turnover. The second is maintenance. A new-build flat may need little for years; an old house with a ageing boiler can need thousands in a single year. Budgeting £1,000 a year for maintenance, as in the example, is a planning figure — adjust it for the property’s age and condition.
What is a good rental yield?
There is no single “good” number, because yields vary by area and by what you count. As a rough guide, many UK landlords look for a gross yield of 5–7% and a net yield of 3–5% after costs and before tax. Yields are usually higher in cheaper areas in the North and Midlands and lower in London and the South East, where prices are high relative to rents. A low yield is not automatically bad: a property in a high-demand area may grow in value, while a high-yield property in a weak area may sit empty or fall in value. Yield measures income, not total return. Total return is yield plus capital growth minus costs — and capital growth is never guaranteed.
| Monthly rent (£200,000 property) | Gross yield | Net yield (after £3,600 costs) |
|---|---|---|
| £800 | 4.8% | 3.0% |
| £1,000 | 6.0% | 4.2% |
| £1,200 | 7.2% | 5.4% |
| £1,500 | 9.0% | 7.2% |
If a yield looks unusually high, ask why. It may mean the rent is optimistic, the area has high voids, or the property needs work that is not in the costs yet.
Costs to include (and costs people forget)
- Mortgage interest. On a buy-to-let mortgage this is usually the biggest cost. Note that individual landlords can no longer deduct mortgage interest from rental income for tax; instead they get a 20% basic-rate tax credit. That changes the after-tax picture — see the tax note below.
- Insurance. Landlord buildings insurance, and contents cover if the property is furnished. Typically a few hundred pounds a year.
- Maintenance and repairs. Budget for the boiler, the roof, appliances and redecoration between tenants.
- Letting agent fees. Full management typically costs 8–15% of the rent plus VAT; tenant-find only is cheaper. The example above does not include agent fees — add them to the costs if you use an agent.
- Voids. Empty months, plus the council tax and bills you pay while the property is empty.
- Compliance. Gas safety checks, electrical safety reports, energy performance certificates and licensing in some areas. These are legal requirements, not optional extras.
Tax: the yield before tax is not what you keep
Rental profit is taxed as income. From 6 April 2027, individual landlords’ rental profits in England, Wales and Northern Ireland are taxed at 24% (basic rate), 44% (higher rate) and 49% (additional rate), up from 20%, 40% and 45% in 2026/27; Scotland and Wales can set their own property rates. On top of that, buying a second property attracts the 5% stamp duty surcharge (see our Stamp Duty Calculator), and selling a buy-to-let can attract Capital Gains Tax at 18% or 24% (see our Capital Gains Tax Calculator). This calculator shows the yield before tax so you can compare properties fairly; work out the after-tax position separately, and take tax advice if you are unsure. Limited companies are taxed differently, which is why some landlords hold property in a company — that is a decision for a qualified adviser, not a calculator.
Yield by property type and area
Yields are not the same everywhere, and the property type matters as much as the postcode. Small flats in university towns and city centres often yield more than large family houses, because the rent per square foot is higher and the price per square foot is lower — but they also have higher turnover, more voids and more wear. Houses in multiple occupation (HMOs), where rooms are let individually, can show the highest yields of all, often 8% or more gross, but they come with licensing, fire safety rules, higher management costs and more hands-on work. New-build flats often yield less, because the purchase price includes a premium for being new, while older properties in established rental areas can yield more but need more maintenance. The area decides the rest: a 6% yield in a town with strong employment and growing rents is a different investment from a 6% yield in a town where rents are flat and tenants are hard to find. Before you buy, check the local rental market properly: look at how many similar properties are advertised, how long they sit empty, and what they actually let for — advertised rents are asking prices, not achieved rents. A yield calculated on an optimistic rent is not a yield at all.
Yield vs capital growth: the total return
Yield is only half the return. The other half is capital growth — the change in the property’s value. A property yielding 4% that grows 3% a year gives a 7% total return before costs; a property yielding 7% that falls 2% a year gives 5%. Neither figure is guaranteed, and both can reverse: the 2008 financial crisis and the 2022 rate rises both cut values in some areas while rents kept rising. History suggests that over long periods, UK house prices have risen roughly in line with earnings, but that is an average over decades and over the whole country — individual areas and individual years vary wildly. A sensible way to think about it is to treat yield as the income you can plan on and capital growth as a bonus you cannot. If the deal only works because you assume the property will be worth much more in five years, it is a speculation, not an investment. The strongest buy-to-let deals are the ones that cash-flow positively from day one on realistic rents and realistic costs, so that you are not relying on a rising market to make the numbers work.
Related: Buy-to-Let Mortgage Calculator · Stamp Duty Calculator · Capital Gains Tax Calculator
Sources: GOV.UK “Tax on property income” and Capital Gains Tax rates; Bank of England PRA buy-to-let underwriting standards. Tax rates for 2027/28 are as announced; confirm before acting. Checked 13 November 2026.