Rental Yield Calculator
Calculate the gross and net rental yield on a buy-to-let property. Gross yield is a quick measure of income relative to property value. Net yield accounts for costs such as mortgage interest, letting agent fees, maintenance, insurance, and void periods.
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Annual costs (for net yield — leave blank if not applicable)
Related: Landlord Profit · Rent vs Buy · Mortgage Payment
How the rental yield calculator works
Rental yield measures the annual return on a buy-to-let property relative to its value. Gross yield is the simplest measure: divide annual rent by the property value and multiply by 100. For example, a property worth £200,000 generating £10,000 per year in rent has a gross yield of 5%.
Net yield gives a more realistic picture by deducting costs including mortgage interest, letting agent fees (typically 8–15% of rent), maintenance and repairs, landlord insurance, and void periods. These costs can easily reduce a 6% gross yield down to 3–4% net.
Typical UK gross yields range from 3–4% in London to 6–8% or higher in some northern cities. However, yield alone does not tell the whole story. Capital growth, void periods, financing costs, and local demand all affect overall returns. Higher-yielding areas often come with lower capital appreciation potential or higher tenant turnover, so consider the full picture before investing.
Frequently asked questions
What is a good rental yield in the UK?
Gross yields of 5–8% are generally considered good for UK buy-to-let. London typically yields 3–4% gross but has historically offered stronger capital growth. Northern cities such as Manchester, Liverpool, and Hull often yield 6–10% gross, though with lower expected capital appreciation.
What is the difference between gross and net yield?
Gross yield = (annual rent ÷ property value) × 100. Net yield deducts all annual costs — mortgage interest, letting agent fees, maintenance, landlord insurance, and void periods — before dividing by property value. Net yield gives a truer picture of actual profitability and is the figure you should use when comparing investment options.
How do void periods affect rental yield?
Every week your property is empty reduces your annual rental income. A 2-week void on a £1,000 per month property costs approximately £462 in lost rent. Most landlords should factor in 2–4 weeks of void periods per year when projecting realistic returns, particularly when switching tenants or carrying out maintenance.
Does rental income get taxed?
Yes. Rental income is subject to income tax after allowable expenses. Mortgage interest relief is restricted to the basic rate of 20% for most landlords under Section 24 rules that were phased in from 2017 and fully in force from 2020. Keeping detailed records of all allowable expenses is important to minimise your tax liability. Consult a tax adviser for guidance on your specific situation.