How to work out rental yield
Gross yield = yearly rent / property price x 100. A £350,000 flat let at £1,600 a month earns £19,200 a year, a gross yield of 5.49%.
Net yield = (yearly rent - costs) / price x 100. It is the better measure, because it includes agent fees, repairs, insurance, service charges and empty weeks.
What is a good rental yield in the UK?
Many landlords aim for a gross yield of 5% to 8%. London yields are often lower, around 4% to 5%, because prices are high. Outer London and northern cities often yield more.
Frequently asked questions
What is a good rental yield?
Around 5% gross or more is often considered good. Net yield after costs is usually 1 to 2 points lower.
Does rental yield include the mortgage?
No. Yield ignores financing. Use the buy-to-let calculator to see cash flow after mortgage interest.
Looking for a home in London?
Homes for saleTo rentThis calculator gives an estimate for guidance only. It is not financial or tax advice. Check the figures with your solicitor, mortgage broker or HMRC before you commit.