Cap Rate Calculator UK
The capitalisation rate, net operating income divided by property value, is the cleanest single number for comparing UK rental properties.
Last updated: August 2026
Property & income
Full market rent before voids. £1,200/month.
8% (≈4 weeks/year) is a common UK assumption.
Operating expenses
Excludes mortgage payments, cap rate is unleveraged. Tap "Itemise" to build this up.
How the NOI is built
Sensitivity
Cap rate as property value (rows) and rent (columns) each move ±10–20%.
| Value ↓ / Rent → | -20% | -10% | Base | +10% | +20% |
|---|---|---|---|---|---|
| -20% | 3.80% | 4.46% | 5.12% | 5.79% | 6.45% |
| -10% | 3.38% | 3.97% | 4.55% | 5.14% | 5.73% |
| Base | 3.04% | 3.57% | 4.10% | 4.63% | 5.16% |
| +10% | 2.76% | 3.24% | 3.73% | 4.21% | 4.69% |
| +20% | 2.53% | 2.97% | 3.42% | 3.86% | 4.30% |
Understanding cap rate
Cap rates vary widely by region because they reflect the trade-off between income and expected capital growth:
- London: ~3–5%. Lower income yield, more of the return expected from capital appreciation.
- Northern cities: ~6–9%. Higher income yield, slower historic capital growth.
- Wales & South West: ~5–8%. In between.
A higher cap rate is not automatically "better", it often signals higher perceived risk, more management, or weaker growth prospects.
Related calculators
Other free UK tools that follow on from this calculation.
Rental Property Calculator
Full UK BTL analysis: cash flow, cap rate, cash-on-cash, IRR and Section 24 tax over your hold.
Buy-to-Let Calculator
Rental yield, ROI, SDLT surcharge and Section 24 mortgage interest restrictions.
Mortgage Calculator
Monthly repayments, total interest and LTV for any UK mortgage scenario.
Stamp Duty Calculator
SDLT for England & NI with post-April-2025 bands, plus Scotland LBTT and Wales LTT.
Reviewed by
Alexandre Bernier, LLM (UK), CFP®, CIM®, PFP®. Financial planner with 18 years in banking and wealth management, holding a UK master of laws and the Canadian CFP®, CIM® and PFP® designations. Writes and reviews every calculator and article on FinanceToolz.
Last updated: August 2026. How figures are sourced, reviewed and corrected is set out in our editorial policy. This is general information, not regulated financial advice.
Sources
Every rate and threshold used by this calculator is taken from the official pages below. If a figure here disagrees with one of these, the official page is right, please tell us.