Rental Yield Calculator & Guide UK 2026
Gross yield vs net yield — the number that actually matters
Gross rental yield is the simple, headline number: annual rent divided by the property’s purchase price (or current value), shown as a percentage. It’s quick to calculate and useful for comparing properties at a glance, but it ignores every cost of actually running the property, which is why it consistently overstates how profitable a buy-to-let really is.
Net yield fixes that by deducting running costs — mortgage interest, letting agent fees, insurance, maintenance, service charges, ground rent and voids — from your annual rent before dividing by the property value. A property advertised with an 8% gross yield can easily fall to 4-5% net once realistic costs and Section 24’s tax treatment of mortgage interest are factored in.
What counts as a "good" yield
- Gross yields of 5-6% are typical for many UK residential buy-to-lets; yields above 7-8% are usually found in lower-priced regional cities rather than London or the South East
- High gross yield doesn’t automatically mean high net profit — older properties with higher maintenance needs, or areas with higher void periods, can erode a headline-strong yield quickly
- Yield is only one part of total return — capital growth (or decline) in property value over time matters just as much, particularly for longer holding periods
- Always compare like-for-like: gross-to-gross or net-to-net, never a gross figure from one listing against a net figure from another
Using yield alongside real tax figures
Yield calculations on their own don’t account for Income Tax, Section 24’s mortgage interest credit, or Capital Gains Tax on eventual sale — all of which materially affect your actual return. Running the same numbers through a full buy-to-let tax calculator gives a far more realistic picture than yield alone.