Rental Yield Calculator
Calculate gross and net rental yield for any UK buy-to-let property. Includes additional property SDLT, management fees, void periods, and monthly cashflow.
Understanding rental yield
Gross rental yield is the simplest measure — annual rent divided by purchase price. A typical UK buy-to-let has a gross yield of 4-7%, with northern cities often offering higher yields than London and the South East.
Net yield accounts for operating costs like management fees (typically 8-12% of rent), insurance, maintenance (budget 1% of property value per year), and void periods. This gives a more realistic picture of your return.
Cash-on-cash return measures your actual return on the cash you invest (deposit plus stamp duty). This is especially useful for leveraged purchases where you're using a mortgage. Remember that buy-to-let purchases always attract the additional property SDLT surcharge of 5%.
Frequently asked questions
- What is a good rental yield in the UK?
- A gross yield of 5-8% is generally considered good for UK buy-to-let. Northern cities like Liverpool, Manchester, and Nottingham often achieve 6-8%, while London typically sees 3-5%. Net yield after costs is usually 1-2% lower than gross yield.
- Why is stamp duty higher for buy-to-let?
- Buy-to-let properties are classified as additional properties, attracting a 5% SDLT surcharge on top of standard rates (from April 2025). This applies to the entire purchase price and significantly impacts your upfront costs and cash-on-cash return.
- What costs should I include in net yield?
- Include management fees (if using a letting agent), landlord insurance, maintenance and repairs (budget 1% of property value), void periods (typically 2-4 weeks per year), and any ground rent or service charges for leasehold properties.
- What is cash-on-cash return?
- Cash-on-cash return measures your annual profit as a percentage of the total cash you invested (deposit plus stamp duty). It accounts for mortgage leverage — a property with modest yield can still deliver strong cash-on-cash returns if most of the purchase is financed.
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