The Rental Yield Calculator helps landlords and buy-to-let investors work out the return a residential property generates from rent alone. Enter the property's value (or purchase price), the monthly rental income, and your annual running costs to see the gross rental yield, the net rental yield after costs, and the monthly cashflow the property leaves you with — plus a full breakdown and a reference guide to what's generally considered a good rental yield in the UK.
| Metric | Type | Basis | Value |
|---|
| Net Rental Yield | General Reference |
|---|---|
| Below 4% | Low |
| 4% – 6% | Average |
| 6% – 8% | Good |
| 8% and above | High-yield (often a lower-value or higher-risk area) |
Rental yield measures the return a property generates from rent, expressed as a percentage of its value. Gross yield uses the rent alone; net yield also deducts your annual running costs, giving a more realistic picture of the return you actually keep.
Based on the property value, monthly rent and annual running costs you've entered, the calculator works out the annual rent (monthly rent × 12), the gross yield (annual rent ÷ property value), the net annual income (annual rent − annual costs) and the net yield (net annual income ÷ property value). If you've entered an annual mortgage interest cost, it's used only to show the monthly cashflow left after both running costs and mortgage interest — it does not change either yield percentage.
Your calculation summary shows a gross rental yield of 6.00% and a net rental yield of 5.20%, based on an annual rent of £9,000 against a property value of £150,000, after deducting £1,200 of annual running costs — leaving a monthly cashflow of £650 before any mortgage interest.
This calculator is provided for general guidance only and does not constitute financial or tax advice. It does not account for void periods, letting agent timing, income tax on rental profits, Section 24 mortgage interest restrictions, or changes in property value or rent over time — always confirm your figures with a letting agent, accountant or financial adviser before making an investment decision.
Rental yield is a simple way of measuring how much income a property generates from rent, expressed as a percentage of its value. It answers a straightforward question: for every £100 the property is worth, how much rent does it bring in over a year? A property worth £150,000 renting for £750 a month brings in £9,000 a year, which is 6% of its value — that 6% is the gross rental yield.
Rental yield is distinct from capital growth (the property simply becoming worth more over time) and from overall return on investment, which also factors in how the purchase was financed. It's one of the first numbers most buy-to-let investors look at when comparing properties, because it's quick to calculate and lets you compare very different properties — a £80,000 flat in the North East against a £600,000 house in the South East — on a like-for-like basis.
Gross rental yield is the simplest version: annual rent divided by property value, with nothing subtracted. It's quick and widely quoted, but it ignores every cost of actually owning and letting the property.
Net rental yield subtracts your annual running costs from the rent before dividing by the property value, so it reflects what you actually keep before tax and mortgage costs. Net yield is always equal to or lower than gross yield — the bigger the gap between the two, the more of your rental income is being absorbed by running costs.
Running costs are the recurring, non-financing expenses of owning and letting the property. Common examples combined into a single annual figure in this calculator include:
Running costs don't normally include mortgage interest or capital repayments — those relate to how the purchase is financed, not to running the property itself, which is why this calculator treats mortgage interest as a separate, optional input used only for the cashflow figure.
As a loose reference only — not a target or a guarantee — a net yield below 4% is often described as low, 4%-6% as average, 6%-8% as good, and 8% or above as high-yield. Recent industry survey data has consistently found some of the highest average gross yields in the North East of England, Wales and Scotland (often in the 7%-9% range), driven by comparatively low property prices relative to achievable rents. London and the South East have tended to show the lowest average yields (often under 6%, and considerably lower again in prime central London), because property prices there are high relative to the rent they command.
These figures move over time and vary enormously street by street, so treat any regional average as a starting point for research, not a substitute for checking actual rents and prices on streets you're considering.
Areas with the highest rental yields are often not the areas with the strongest long-term capital growth, and vice versa — expensive city-centre locations with lower yields have frequently delivered stronger price growth over time, while some higher-yielding regional areas have seen flatter prices. Neither approach is automatically "better"; it depends on whether you're prioritising monthly income now, long-term equity growth, or some balance of both, and on your own financing and tax position.
A void period is any stretch of time the property sits empty between tenancies, generating no rent. Both gross and net yield as calculated above assume the property is let for the full 12 months — in practice, re-letting, referencing, minor repairs and finding a replacement tenant all take time. A single month of void a year reduces your real annual rent by roughly one-twelfth (about 8%), which flows straight through to a lower real-world yield than the headline figure suggests. Build an allowance for voids into your own planning, even though it isn't a separate input in the headline calculation above.
A handful of practical levers can improve yield on an existing property: reviewing rent periodically to keep pace with the local market (within the rules and notice periods that apply to the tenancy), reducing running costs where safely possible, minimising void periods through good tenant retention and prompt re-letting, and improving the property's condition or furnishing to support a higher achievable rent.
A more significant option for some properties is converting to a House in Multiple Occupation (HMO) — letting individual rooms to multiple unrelated tenants rather than the whole property to one household — which can substantially increase total rental income from the same building, at the cost of more intensive management and different licensing and safety requirements. Use the HMO Yield Calculator to see how that trade-off might work out for a specific property.
No. Both gross and net rental yield, as shown above, are measured against the full property value regardless of how it was purchased — so mortgage interest and capital repayments are never deducted from either percentage. That's deliberate: yield is meant to describe the property's own performance, independent of financing choices, so two investors who buy the same property in cash versus with a large mortgage see the same gross and net yield.
Mortgage interest does matter for your actual pocket, which is why this calculator uses it (if you provide a figure) purely to show a monthly cashflow figure — what's left after running costs and mortgage interest are both paid. That's closer to a "cash-on-cash" view of the investment, and it's the figure that tends to matter most for day-to-day affordability, even though it isn't part of the yield percentage itself.
Take a property bought for £150,000, let at £750 a month, with combined running costs of £1,200 a year (service charge, insurance, a maintenance allowance and letting agent fees). Annual rent is £750 × 12 = £9,000. Gross yield is £9,000 ÷ £150,000 = 6.00%. Net annual income is £9,000 − £1,200 = £7,800, giving a net yield of £7,800 ÷ £150,000 = 5.20%. Monthly cashflow before any mortgage interest is £750 − (£1,200 ÷ 12) = £650. If the same purchase also carried £3,000 a year of mortgage interest, monthly cashflow would fall to £750 − £100 − £250 = £400, while both yield percentages stay exactly the same, because they're based on the property's value, not its financing.
Rental yield is only one input into a buy-to-let decision. It's usually worth looking at it alongside the cost of financing (see the Buy-to-Let Mortgage Calculator), the upfront cost of purchase (see the Stamp Duty calculators and the Conveyancing Fees Calculator), the ongoing tax position (see the Section 24 Landlord Tax Calculator), and the eventual cost of selling (see the Property Capital Gains Tax Calculator). If you're weighing up buying at all versus renting, the Rent vs Buy Calculator looks at that broader question directly.
Before relying on a rental yield figure, it's worth checking the rent you've entered against real comparable listings for similar properties (same bedroom count, condition and location) rather than a rough guess, an agent's optimistic estimate, or a figure that's since gone out of date. Portals showing currently advertised rents, and local letting agents who know the immediate street or postcode, are usually a more reliable starting point than a national or regional average alone.