Rental yield calculator
Gross and net yield from price and rent — and what counts as good.
Before mortgage costs, void periods and tax — a 'net' yield here only nets off day-to-day running costs. Not investment advice.
Gross yield is annual rent divided by purchase price: a £200,000 property renting at £950 a month collects £11,400 a year — a 5.7% gross yield. It is the industry’s quick screening number, useful for comparing properties and areas at a glance. But nobody banks gross yield, because the costs haven’t been paid yet.
Net yield subtracts them: letting agent fees (10–15% of rent for full management), repairs and maintenance, landlord insurance, safety certificates, voids (budgeting 2–4 weeks a year empty is prudent), and for flats the service charge — often the single biggest line. On the example above, £3,400 of annual costs leaves £8,000: a 4% net yield, before mortgage interest and before tax. It is common for a flat with a punchy service charge to show a healthy gross yield and a poor net one, which is exactly why the distinction earns its keep.
What counts as “good” is regional and structural: gross yields of 6–8%+ are common in northern cities and on HMOs, while London and the South East often run 3–5% — lower yield, historically offset by stronger capital growth. High headline yields can also price in real risks: difficult stock, weaker tenant demand, or short leases. Yield measures income, not total return — and it says nothing yet about financing costs, the 5-point stamp duty surcharge, or tax, which the buy-to-let costs calculator layers on. Screen with gross, decide with net, and stress the rent downwards before you trust either.
Common questions
How do I calculate rental yield?
Gross: annual rent ÷ purchase price × 100 — so £950/month on a £200,000 property is (11,400 ÷ 200,000) = 5.7%. Net: subtract annual running costs (agent, maintenance, insurance, voids, service charge) from the rent first. Include buying costs (stamp duty, legal) in the denominator for the strictest version.
What is a good rental yield in the UK?
Roughly: 5–6% gross is solid, 7%+ is strong, below 4% only makes sense where capital growth is the real thesis. Northern cities and student/HMO markets run higher; London and the South East lower. Judge on net yield for the specific property — a 6.5% gross flat with a £3,000 service charge can net less than a 5.5% gross terrace.
What costs should I subtract to get net yield?
Letting agent (10–15% of rent if fully managed), maintenance and repairs (budget 5–10% of rent), landlord insurance (£150–£400), gas/electrical certificates and EPC, voids (2–4 weeks a year), and any service charge and ground rent. Mortgage interest and income tax sit below net yield — they belong to your financing, not the property.
Why is a high yield sometimes a warning sign?
Because yield is rent over price, and a low price is sometimes low for a reason: weak tenant demand, unsellable stock, short leases, high-crime pockets, or cladding and maintenance liabilities. A 9% gross yield with three months of voids and constant repairs nets less than a boring 6%. Check what is generating the number before admiring it.
Numbers are half the story. Check the home itself.
One search pulls the official record on any address in England & Wales — value, flood risk, schools, noise and more, scored 0–100.