How This Calculator Works
Gross yield = (Annual Rent ÷ Purchase Price) × 100 — a quick headline number, but it ignores costs and voids. Net yield is more realistic: it deducts letting agent fees, maintenance, insurance, ground rent/service charge, and a void allowance (weeks per year the property may sit empty) from the annual rent before dividing by the purchase price. Mortgage payments are excluded from both — for the actual pounds left over after your mortgage, use the Cashflow Calculator.
Rental Yield FAQs
What is a good rental yield in the UK?
A gross yield of 5–6% is average; above 6% is good; above 8% is excellent. Northern cities like Sunderland, Hull, Bradford and Liverpool achieve 7–10% gross. London averages 2–4%. Net yield (after costs) is typically 1.5–2.5% below gross for a managed property.
How do I calculate gross rental yield?
Gross yield = (Annual Rent ÷ Property Price) × 100. Example: £900/mo × 12 = £10,800 ÷ £150,000 = 7.2%. Net yield deducts costs: (Annual Rent − Annual Costs) ÷ Price × 100.
What costs should I include in net yield?
Typical costs to deduct for net yield: letting agent fees (8–15%), maintenance/repairs (5–10% of rent), buildings insurance (£400–£800/year), void allowance (2–4 weeks/year), and for leasehold: ground rent and service charge. Mortgage payments are usually excluded from yield calculations but included in cashflow.
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