Rental yield calculator UK
A free buy-to-let yield calculator for UK landlords: work out gross rental yield, net yield and cash-on-cash return on any property in seconds. No signup required.
Property details
Current market value or purchase price
Expected monthly rental income
Insurance, maintenance, void allowance, fees
Cash deposit you will put down
Estimated upfront costs on top of deposit
Pre-filled with the current UK average buy-to-let rate
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Results
Assumptions & sources
Every figure above is calculated from the inputs you entered using the rules below. Tap a reference to read the primary source.
- Gross yield[1]
Annual rent divided by purchase price, before any costs.
- Net yield[1]
Annual rent less running costs, divided by total cash-in including purchase costs.
- Stamp duty estimate[2]
Additional-property SDLT bands for England and Northern Ireland, applied to the purchase price.
- Rent benchmarks[3]
Compare your rent figure with ONS Price Index of Private Rents for your area.
- [1]Renting out your property: landlord responsibilities and incomeGOV.UK — Allowable running costs a landlord must fund from rent
- [2]Stamp Duty Land Tax: rates and higher rates for additional propertiesHMRC / GOV.UK — SDLT bands used in the purchase-cost estimate
- [3]Price Index of Private Rents, UKOffice for National Statistics — Market rent benchmarks by region
Read how we verify and refresh these figures in our data methodology.
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Start for freeHow rental yield is calculated
Three numbers matter, and they answer different questions. Gross yield compares properties. Net yield tells you what the asset earns after running costs. Cash-on-cash return tells you how hard your own money is working once the mortgage is paid.
- Gross yield = annual rent ÷ purchase price × 100
- Net yield = (annual rent − annual running costs) ÷ total capital invested × 100
- Cash-on-cash return = (annual rent − running costs − mortgage interest) ÷ cash invested × 100
Worked example: a £250,000 property let at £1,200 a month
This example rewrites itself from the numbers you entered above — change any input and the walkthrough follows.
Annual rent is £14,400. Running costs of £220 a month — insurance, a maintenance allowance, management and a void provision — come to £2,640 a year, leaving £11,760 of net income.
Gross yield is £14,400 ÷ £250,000 = 5.76%.
With a deposit of £62,500 (25% of the price), an additional-property stamp duty estimate of £12,500 and £5,000 of legal and refurbishment costs, total cash invested is £80,000. Measured against the full capital in the deal (£267,500), net income of £11,760 is a 4.40% net yield.
Interest-only borrowing of £187,500 at 5.5% costs £10,313 a year, leaving £1,448 of cash profit. Cash-on-cash return is £1,448 ÷ £80,000 = 1.81%.
Put 40% down instead (£100,000) and the interest bill changes to about £8,250, moving cash profit to £3,510 on £117,500 invested — a 2.99% cash-on-cash return. Leverage is the single biggest lever on this figure.
Second worked example: a £120,000 northern flat let at £750 a month
Annual rent is £9,000. Running costs are lower in cash terms but higher as a share of rent: £150 a month for insurance, maintenance, management and a one-month void allowance is £1,800 a year, leaving £7,200 of net income.
Gross yield is £9,000 ÷ £120,000 = 7.50%. With additional-property stamp duty of £6,000, £2,500 of legal and refurbishment costs and a 25% deposit of £30,000, cash invested is £38,500 and total capital in the deal is £128,500. Net yield is £7,200 ÷ £128,500 = 5.60%.
Interest-only borrowing of £90,000 at 5.5% costs £4,950, leaving £2,250 of cash profit — a 5.84% cash-on-cash return on a quarter of the capital a mid-priced southern terrace needs.
The trade-off is growth and liquidity. A higher-priced property appreciating at 3% a year adds more equity in cash terms than the flat's £3,600, so total return can favour the lower-yielding asset over a long hold. Compare it against your own figures below, then decide whether you are buying income or growth.
| Measure | Your property | £120k flat |
|---|---|---|
| Annual rent | £14,400 | £9,000 |
| Annual running costs | £2,640 | £1,800 |
| Gross yield | 5.76% | 7.50% |
| Net yield | 4.40% | 5.60% |
| Cash invested | £80,000 | £38,500 |
| Cash-on-cash return | 1.81% | 5.84% |
Download your yield worksheet
Export the figures currently in the calculator — inputs, stamp duty, annual cash flow and all three yield measures — as a spreadsheet you can keep with your deal appraisal or send to a broker or accountant.
Opens in Excel, Numbers or Google Sheets. Nothing is uploaded — the file is generated in your browser.
What counts as a good yield in the UK
Gross yields of 5–8% are a common target for single-let buy-to-let. Northern cities and commuter towns typically sit at the upper end; London and the South East often price at 3–5% with capital growth expected to make up the difference. Shared houses can exceed 10% gross but carry licensing, bills, higher management and more turnover.
Judge a yield against the cost of your finance, not in isolation. When borrowing costs sit near 5.5%, a 5% gross yield on a leveraged purchase is usually cash-flow negative once running costs are counted. Sense-check the mortgage side with the buy-to-let mortgage calculator and the purchase tax with the stamp duty calculator.
Before you commit, price in the compliance cycle too — the annual gas check, the five-yearly EICR and any works needed to hold the EPC minimum standard are real costs against yield.
Rental yield questions landlords search for
How do you calculate rental yield on a UK property? Take the monthly rent, multiply by twelve, divide by the purchase price and multiply by 100. That is gross yield. For net yield, subtract a full year of running costs first and divide by the total capital in the deal — purchase price plus stamp duty, legal fees and works — so the percentage reflects every pound the property has cost you.
What rental yield do mortgage lenders want to see? Buy-to-let lenders test rent against the mortgage payment rather than yield directly. Most require rent to cover 125–145% of interest at a stressed rate of around 5.5–7%. On a £187,500 loan stressed at 7%, that means roughly £1,367–£1,586 of monthly rent for a higher-rate taxpayer — a test many 5% gross yield purchases fail.
Is a 5% rental yield good? It is average for England and Wales single lets, and workable if the property is unencumbered or lightly geared. On a 75% loan at current rates a 5% gross yield rarely produces positive cash flow, so it only makes sense where you expect capital growth to carry the return.
How is rental yield different from return on investment? Yield measures income against value. ROI, or total return, adds capital growth and equity paid down by the mortgage, then deducts the full cost of finance and tax. A property can show a thin 1.9% cash-on-cash return and still deliver a double-digit total return in a growth market.
Should yield be calculated before or after tax? Calculate it before tax so properties are comparable, then apply your marginal rate separately. Since mortgage-interest relief became a basic-rate tax credit, higher-rate landlords should always model the post-tax position before committing — particularly on a heavily geared purchase.
Frequently asked questions
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OpenAbout the publisher
This page is published by NestIQ Wealth, a UK property management and compliance platform used by self-managing landlords to track statutory deadlines, store certificates with full version history, and evidence compliance per property. Our guidance is written by the team that builds those compliance rules into the product, so the dates, cycles and penalties here are the same ones the software enforces.
- •Researched from primary sources. Every rule is checked against legislation.gov.uk, GOV.UK guidance and the responsible regulator — never rewritten from other blogs. See how we source our data.
- •Reviewed as the law changes. Pages carry a visible review date — last reviewed August 2026 and are revisited when legislation, deadlines or penalty levels move.
- •No hidden commission. We are not paid to refer you to contractors, brokers or agents. Costs quoted are illustrative market ranges, not quotes or offers.
- •Guidance, not regulated advice. Nothing here is legal, tax or financial advice. For decisions specific to your circumstances, speak to a solicitor, accountant or qualified adviser.
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