Rental yield
UK-wide
Rental yield is the annual rental income a property produces, expressed as a percentage of its value or purchase price. It is the core measure landlords and investors use to compare properties and to judge whether the rent justifies the price paid. In property, “yield” always means income relative to price, not the change in a property’s value, which is capital growth. Gross yields across Great Britain run from about 5.1% in London to about 7.9% in the North East, according to Landlord Resource analysis of Zoopla data published in August 2026.
Gross yield, net yield and cash-on-cash return
Three versions of the figure matter. Gross yield divides annual rent by the property value and multiplies by 100. It is a quick screen that ignores costs. Net yield first deducts running costs such as management, insurance, safety certificates and an allowance for void periods, which gives a truer picture of what a property earns. Cash-on-cash return measures annual pre-tax cash flow against the cash actually invested, which is the figure that matters most on a mortgaged buy-to-let. From working with self-managing landlords across the UK, we see that net yield, not the headline gross figure, is the number that reliably predicts whether a property performs.
How rental yield varies
Yield varies most by location and property type. Lower-priced northern towns tend to produce the highest yields, while London and the South East sit lower but have historically offered stronger capital growth. Letting an HMO by the room can push gross yields into double figures, at the cost of more management and licensing. As a rough guide, a gross yield of 5% to 7% is solid and 7% or more is strong. The rental yield calculator works out the figure for a specific property, and our guide to rental yield vs capital growth covers how to weigh the two when choosing between properties.
How landlords use rental yield
Yield is most useful as a comparison tool. It lets very different properties be ranked on a like-for-like basis before other factors, such as capital growth potential, tenant demand and void risk, are weighed. Landlords managing a buy-to-let portfolio in one place track actual income and costs per property, which shows the real net yield a property delivers rather than the figure projected at purchase. Comparing the projected and actual figures is the quickest way to spot a property whose costs have crept up.
Frequently asked questions
Is rental yield calculated on gross or net?
Both. Gross yield is a quick screen that ignores costs, while net yield deducts running costs to show what a property actually earns. Serious comparisons between properties use net yield.
What is the difference between rental yield and return on investment?
Yield measures annual income against the property's value. Return on investment, including cash-on-cash return, measures the return against the cash you have actually invested, so it reflects the effect of any mortgage. A property can show a modest yield but a strong cash-on-cash return once leverage is taken into account.
What does yield mean in property?
Yield is the income a property produces in a year, expressed as a percentage of its value or purchase price. It measures income only. A rise in the property’s value is capital growth, which is measured separately. Together they make up the total return on a property.
