Calculate gross and net rental yield instantly using the calculator below. This guide also covers the rental yield formula, what counts as a good yield in the UK, average yields by region, and how lenders use rental income when assessing buy-to-let mortgage applications.
Rental yield = (Annual Rent ÷ Property Value) × 100. A property worth £200,000 generating £1,000/month in rent has a gross yield of 6%. In the UK, 5% to 8% gross yield is generally considered good. Use the calculator below for instant results.
Enter the property value and monthly rent below to calculate gross rental yield instantly. Toggle the net yield section to include costs.
For illustration only. Results are based on figures entered and do not account for tax, voids, or variable costs. Always seek professional advice before purchasing an investment property.
Rental yield is a percentage figure that shows how much annual income a property generates relative to its value. It is the primary metric used by buy-to-let investors to compare properties and assess whether a purchase is likely to generate positive returns.
Gross Rental Yield (%) = (Annual Rental Income ÷ Property Value) × 100
Example: A property purchased for £175,000 generating £875 per month in rent produces annual income of £10,500.
Gross rental yield = (£10,500 ÷ £175,000) × 100 = 6%
Gross rental yield uses the full property value and does not deduct any costs. It is the most widely used metric for comparing properties quickly, but it overstates the actual return because it ignores mortgage payments, letting agent fees, maintenance, insurance and void periods.
Net yield is what you actually earn. Gross yield is what you compare. Use gross yield to screen properties and net yield to make the final decision.
Net rental yield deducts all annual costs from the rental income before calculating the percentage. This gives a more accurate picture of actual return on the investment.
Net Rental Yield (%) = ((Annual Rent − Annual Costs) ÷ Property Value) × 100
Using the same example: £10,500 annual rent, minus annual costs of £4,200 (mortgage, fees, maintenance, insurance), gives net annual income of £6,300.
Net rental yield = (£6,300 ÷ £175,000) × 100 = 3.6%
Annual costs to include in a net yield calculation: mortgage interest payments, letting agent fees (typically 8% to 15% of rent), buildings insurance, landlord insurance, maintenance and repairs allowance, ground rent and service charges (for leasehold), landlord licensing fees, and a void period allowance (typically 4 to 6 weeks per year).
A gross rental yield of 5% to 8% is generally considered good for UK residential buy-to-let property. What counts as acceptable depends on your strategy, financing costs and target region.
| Gross yield | Assessment | Typical scenario |
|---|---|---|
| Below 4% | Low | May not cover mortgage and costs. Common in prime London and South East. May suit capital growth strategy. |
| 4% to 5% | Moderate | Borderline. Viable with a large deposit or low borrowing. Common in commuter belt and larger Southern cities. |
| 5% to 7% | Good | Solid income return. Most Midlands, Northern England and Scottish cities. Manageable with standard BTL financing. |
| 7% to 9% | Strong | Excellent yield. Typically Northern cities, HMOs, or multiple-unit properties. Assess condition and location carefully. |
| Above 9% | Very high | High yield often indicates higher risk: location, condition, tenant demand, or management intensity. HMO licences may apply. |
Regional averages vary significantly. Northern cities consistently outperform London and the South East on yield, while London and the South East typically offer stronger long-term capital growth prospects.
| Region / City | Avg gross yield | Yield trend |
|---|---|---|
| Dundee, Scotland | 8% to 10% | Consistently high |
| Liverpool | 7% to 9% | Strong, rising |
| Glasgow | 7% to 9% | Strong |
| Bradford / Halifax (West Yorkshire) | 6% to 8% | Strong |
| Manchester | 5% to 8% | Good, varies by area |
| Leeds | 5% to 7% | Good |
| Nottingham / Derby | 5% to 7% | Good |
| Birmingham | 4% to 6% | Moderate to good |
| Bristol | 4% to 5% | Moderate |
| London (outer) | 3.5% to 5% | Moderate |
| London (central) | 2.5% to 4% | Low yield, capital focus |
Regional averages are indicative and vary by property type, condition, street, and time of year. Data sources include Rightmove, Zoopla and ONS private rental statistics. Always conduct local research before purchasing. Last updated May 2026.
When assessing a buy-to-let mortgage application, lenders do not use rental yield directly — they use a rental coverage ratio. Most lenders require the expected monthly rent to cover at least 125% to 145% of the monthly interest payment at a stressed rate, typically 5% to 6%.
A property valued at £200,000 with a 25% deposit means a £150,000 mortgage. At a stressed rate of 5.5%, the notional monthly interest is £687.50. At a 145% coverage ratio, the lender requires minimum monthly rent of £997. If the expected rent is £900, the deposit required increases until the coverage ratio is met. A broker can confirm exact requirements for specific lenders before purchase.
A high rental yield does not automatically mean the property will pass a lender's stress test. Lenders assess rent against the mortgage payment — not against the property value — which means a high-yield property in a low-value area can still fail the stress test if the mortgage is large relative to the rent. As a whole-of-market mortgage broker, we check rental coverage across lenders before any application is submitted.
Call 01422 354011 or use the form below. We check rental coverage and identify the most suitable lenders before you commit to a purchase.
Get Buy-to-Let Mortgage AdviceAs a whole-of-market mortgage broker, we check rental coverage ratios across lenders, identify the most appropriate product for your circumstances and manage the application from start to offer.
Initial discussion free. A broker fee of £299 is payable if you choose to proceed following a formal mortgage offer. This fee is non-refundable once charged. We may also receive commission from the lender. Your home may be repossessed if you do not keep up repayments on your mortgage.
Get Buy-to-Let Mortgage AdviceGeneral information: This article is for general guidance only and does not constitute regulated mortgage or financial advice. Rental yield figures and regional averages are indicative only and based on publicly available data. Property investment involves risk including potential loss of capital.
Regulatory status: Woodhall Mortgages is authorised and regulated by the Financial Conduct Authority (FRN 762513). As a whole-of-market mortgage broker, we consider mortgages from across the market, subject to lender criteria and product availability.
Broker fee: A broker fee of £299 is payable if you choose to proceed following a formal mortgage offer. This fee is non-refundable once charged. We may also receive commission from the lender.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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