Rental Yield Calculator UK

Gross yield, net yield and cash-on-cash return, the three numbers that matter for a UK buy-to-let.

Property

£
£

Annual gross: £14,400

2-4 weeks is a sensible UK assumption.

£

Excludes mortgage interest. Typical: 10-15% of gross rent for a managed BTL.

If leveraged

£

BTL mortgages typically need 25% minimum. Higher deposits get better rates.

%

Calculator uses interest-only (typical for BTL).

Gross yield
5.76%
Annual rent / price
Net yield
4.34%
After voids & costs
Cash-on-cash
0.85%
After mortgage interest

Annual cash flow

Gross rent (£1,200/month × 12)£14,400
Void loss (2 weeks)-£554
Operating costs-£3,000
Mortgage interest (5.5% on £187,500)-£10,313
Net rental profit (pre-tax)£534
This is the pre-tax profit. UK BTL profit is taxed at income tax rates; mortgage-interest tax relief is restricted to a 20% credit (Section 24).
Mortgage interest is not tax-deductible. Since 2020 individual landlords can't deduct mortgage interest from rental profit. Instead you get a 20% tax credit. For higher-rate landlords this means much of the "cash-on-cash" advantage of leverage is lost.

Understanding rental yields

Three different ways to express the same investment, each useful for a different question:

  • Gross yield compares like-for-like across cash and leveraged purchases, useful when comparing properties.
  • Net yield tells you the property's real income return ignoring how you finance it, useful for cash buyers.
  • Cash-on-cash measures return on the actual cash you put in, what matters most to a leveraged BTL investor.

For a typical UK BTL with 75% LTV and a 5.5% mortgage rate, the cash-on-cash number can be 3-4× the gross yield. That's the leverage doing its job (and amplifying losses on the downside too).

  • < 4% gross, typical prime central London. Most of the return is expected from capital growth, not income.
  • 4-6% gross, outer London, the South East and many UK suburbs. Mixed strategy.
  • 6-9% gross, Midlands, North, regional cities. Income-focused, slower capital growth.
  • 9%+ gross, HMOs, holiday lets, properties with material issues. Higher operational risk and management.

Related calculators

Other free UK tools that follow on from this calculation.

Buy-to-Let Calculator

Rental yield, ROI, SDLT surcharge and Section 24 mortgage interest restrictions.

Rental Property Calculator

Full UK BTL analysis: cash flow, cap rate, cash-on-cash, IRR and Section 24 tax over your hold.

Cap Rate Calculator

Capitalisation rate, NOI ÷ property value, to compare UK rental properties like for like.

Mortgage Calculator

Monthly repayments, total interest and LTV for any UK mortgage scenario.