Calculate gross yield, net yield and cash-on-cash ROI on your UK buy-to-let property. Updated with 2026 SDLT rates, average UK rents and current market benchmarks.
Understanding your true rental yield helps you compare properties, assess profitability and make smarter buy-to-let investment decisions.
Rental yield is the annual return on a property investment expressed as a percentage of the property's value. It is the primary metric used by UK landlords and property investors to evaluate whether a buy-to-let purchase stacks up financially before accounting for capital growth.
In 2026, rising mortgage costs and increased SDLT surcharges mean the gap between gross yield and net yield has widened significantly. A property showing a 6% gross yield may produce only a 3.5–4% net yield once mortgage interest, management fees, maintenance and void periods are factored in — making the net yield calculator essential for accurate planning.
This tool calculates all three key metrics — gross yield, net yield and cash-on-cash ROI — so you can assess any UK property investment with confidence before committing to a purchase.
Choose your calculation method and enter your property details to instantly calculate your rental yield or ROI.
Key changes affecting UK landlords and rental yield calculations in the 2026 tax year.
Average UK asking rents reached approximately £1,381 per month in early 2026, with the strongest rental growth concentrated in major Northern cities such as Manchester, Liverpool and Leeds, where demand continues to outpace supply. Average gross yields across the UK stand at around 5.8%, though this varies significantly by region — from under 4% in prime London postcodes to over 8% in parts of Merseyside and the North East.
The October 2024 Autumn Budget introduced two significant changes for landlords: the SDLT additional dwelling surcharge increased from 3% to 5% with immediate effect, and capital gains tax on residential property for higher-rate taxpayers was raised from 28% to 24%. These changes have increased upfront acquisition costs and reduced after-tax returns, making accurate net yield and ROI calculations more important than ever. See our UK Capital Gains Tax Calculator for full CGT estimates on property disposals.
For individual landlords, mortgage interest continues to be restricted to the 20% basic rate tax credit under Section 24, meaning higher and additional rate taxpayers can no longer deduct mortgage interest costs in full. This makes cash purchases or company ownership structures increasingly attractive for higher-rate taxpayers looking to maximise their rental yield in 2026.
Key figures landlords need to evaluate buy-to-let investments in the current UK market.
National average for 2026. Above this is considered a good yield for a UK buy-to-let investment.
Raised from 3% to 5% effective 31 October 2024. Applies on top of standard SDLT rates for additional properties.
Higher-rate taxpayer CGT on UK residential property gains. 18% for basic-rate taxpayers. Raised from 28% in Oct 2024.
Individual landlords receive a 20% tax credit only (Section 24). Higher-rate taxpayers cannot deduct full mortgage costs.
National average asking rent per month. London averages £2,100+; Northern England averages £850–£1,100.
Average UK house price around March 2026. Regional range: £160k (North East) to £520k+ (London).
Follow these four steps to get your full rental yield and ROI results in seconds.
Select Gross Yield for a quick top-line figure, Net Yield for a realistic return after costs, or Cash-on-Cash ROI for a leveraged investment view.
Input the purchase price, expected monthly rent and any relevant costs such as management fees, maintenance, insurance and mortgage payments.
The tool instantly returns your yield percentage with a benchmark indicator showing how your property compares to the 2026 UK average yield of 5.8%.
Use the breakdown table to identify your biggest cost items, compare properties side by side, and decide whether the investment meets your target return.
Understanding the difference between gross yield, net yield and ROI helps you choose the right metric for each decision.
How rental yields compare across the UK's major cities based on current average rents and property prices.
| City | Avg Property Price | Avg Monthly Rent | Gross Yield (Est.) | Yield Rating |
|---|---|---|---|---|
| Liverpool | £175,000 | £1,240 | ~8.5% | ✅ Excellent |
| Sunderland | £130,000 | £880 | ~8.1% | ✅ Excellent |
| Hull | £140,000 | £890 | ~7.6% | ✅ Excellent |
| Nottingham | £185,000 | £1,100 | ~7.1% | ✅ Good |
| Manchester | £230,000 | £1,300 | ~6.8% | ✅ Good |
| Sheffield | £200,000 | £1,080 | ~6.5% | ✅ Good |
| Leeds | £225,000 | £1,150 | ~6.1% | 📊 Average |
| Birmingham | £240,000 | £1,180 | ~5.9% | 📊 Average |
| Bristol | £360,000 | £1,500 | ~5.0% | 📊 Average |
| Edinburgh | £310,000 | £1,280 | ~4.9% | 📊 Average |
| London (Outer) | £450,000 | £1,750 | ~4.7% | ⚠️ Low |
| London (Prime) | £850,000 | £2,800 | ~3.9% | ⚠️ Low |
* Estimates based on 2026 average asking rents and Land Registry price data. Actual yields will vary by property type, condition and location within each city.
Related tools and official guidance to help you manage your buy-to-let investment finances.
Higher yield is useful only when the income is sustainable, compliant and realistic after costs.
For mortgaged individual landlords, the tax result can look very different from the cash-flow result.
Section 24 is the common name for the UK finance-cost restriction affecting individual residential landlords. Instead of deducting mortgage interest in full from rental income before calculating taxable profit, landlords generally receive a basic-rate tax credit. This means a higher-rate landlord can be taxed on a profit figure that is higher than the real cash left after mortgage interest.
For example, a property with £15,000 annual rent, £3,000 non-finance costs and £8,000 mortgage interest has only £4,000 pre-tax cash flow. But the taxable rental profit before the finance-cost tax reducer can be £12,000. The basic-rate tax credit reduces the final bill, but it may not fully offset the extra tax exposure for higher-rate or additional-rate taxpayers.
This is why serious buy-to-let investors should use three layers of analysis: gross yield to shortlist properties, net yield to understand the asset's operating return, and cash-on-cash ROI or tax-adjusted cash flow to understand the real return on the investor's money.
Common questions about calculating and improving rental yield on UK buy-to-let properties in 2026.