Gross yield is the first number any agent shows you. It's also the most misleading. Use this calculator to see net yield, monthly cashflow, cash-on-cash return, and the 20-year ROI after capital growth. The numbers that actually drive portfolio performance.
Assumptions: interest-only BTL mortgage. Illustrative only, excludes tax, capital gains and lender stress testing.
The four numbers that matter
What your calculator is actually showing you
Gross yield
Annual rent ÷ property price. Useful as a top-line number but ignores voids, costs and finance.
Net yield
Annual rent (less voids + running costs) ÷ property price. Reflects what actually hits your account.
Cash-on-cash
Net annual cashflow ÷ total cash invested (deposit + SDLT + legals). The number your portfolio grows from.
Total ROI
Total return (cashflow + capital gain) ÷ cash invested, over hold period. The headline investor metric.
Frequently asked
UK rental yield FAQ
For 2026, gross yields of 6% or higher are considered strong on UK regional residential BTL. Net yields of 4-5% are realistic after voids, management, maintenance and ground rent or service charge. Anything below 4% gross typically only makes sense as a capital-growth-led play in prime London or commuter belts.
Gross yield = annual rent ÷ purchase price × 100. Net yield = (annual rent minus voids, management fees, maintenance, insurance, ground rent and service charge) ÷ purchase price × 100. Cash-on-cash return = annual net cashflow ÷ total cash invested (deposit plus SDLT plus legal and setup fees). Use cash-on-cash for leveraged purchases; net yield for cash buyers.
Standard deductions: lettings management fees (10-12% of rent plus VAT for full management, 7-8% tenant-find only), 4-6 weeks void allowance, annual maintenance budget of 1-1.5% of property value, landlord insurance £150-£300, ground rent and service charge on apartments (£1,500-£3,000 typical), gas and electrical compliance £200-£300 annually, and accountant fees £400-£800.
Plan for 4-6 weeks of vacancy per year on UK BTL, equivalent to 8-12% of gross rent. Well-let regional 1-bed apartments in Manchester, Liverpool and Birmingham average 2-3 weeks turnaround between tenancies in 2026. Voids run higher on student-let HMOs (typically 8 weeks over the summer break) and on properties priced above the local rental ceiling.
Liverpool L1, L3, L5 and L7 lead with 7-9% gross yields on sub-£160k 1-bed and 2-bed apartments. Sheffield S1 and Newcastle NE1 deliver 7-8%. Manchester Greengate, Salford Quays and the Northern Quarter range 6-7%. Birmingham city-centre studios sit at 6-7%. London zone 1-3 yields compress to 3.5-5% but offer the strongest long-term capital preservation.
Yield is the rental return on the property's value in a single year. ROI (return on investment) blends rental cashflow with capital growth, mortgage paydown and tax effects across the hold period, divided by the cash invested. A 6% gross yield property in Manchester held 10 years with 4% annual capital growth typically delivers a total ROI of 180-220% on cash invested for a 75% LTV purchase.
Yield-led investing suits income replacement (retirees, expats funding lifestyle abroad, sandwich-generation investors). Growth-led suits long-horizon wealth building, where capital appreciation compounds untaxed until sale. Most Red Cardinal portfolios blend the two: 60-70% yield-weighted regional BTL for monthly cashflow, 30-40% growth-weighted London or near-London for the long-term gain.
Treat marketing rental projections with caution. Always verify against (1) HM Land Registry rent comparables for the postcode, (2) Rightmove and Zoopla 'sold prices' history with rent estimates, (3) ONS Private Rental Market Statistics for the local authority. Reliable advisor projections sit within ±5% of these data sources. Anything 10%+ above local comparables is a red flag.
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