What is a good rental yield in the UK?

How to calculate rental yield

Gross rental yield is the simplest measure of a buy-to-let investment's return. The formula is straightforward: divide the annual rent by the purchase price, then multiply by 100.

For example, if you buy a property for £200,000 and rent it for £1,000 per month (£12,000 per year), your gross yield is 6%.

Net yield is more useful because it accounts for costs. Subtract your annual running costs (mortgage payments, insurance, maintenance, management fees, void periods) from the annual rent before dividing by your total investment.

What yield should you target?

As a general rule for UK buy-to-let:

Below 4% — weak yield, likely negative cashflow after costs 4-5% — marginal, depends heavily on capital growth expectations 5-6% — solid, sustainable cashflow in most scenarios 6-8% — strong, typical of the best BTL deals outside London Above 8% — exceptional, but verify the numbers carefully

London yields tend to be lower (3-5%) due to high prices, while northern cities like Manchester, Liverpool, and Leeds often deliver 6-8%.

Yield isn't everything

A high yield on paper can mask serious problems: high void rates, problem tenants, structural issues, or a declining area. Always combine yield analysis with risk assessment, local market data, and a physical inspection.

BuildLink combines yield calculations with AI-powered risk assessment, comparable sales data, school and crime ratings, flood risk analysis, and EPC compliance checks — giving you the full picture in under 60 seconds. Pair this guide with the regional yield breakdown and the full deal-analysis checklist before you run numbers on any listing.