UK BTL Yield Calculator

Gross yield is annual rent divided by purchase price — useful as a top-line comparison metric. Net yield (also called yield-on-cost) is annual rent minus operating costs, divided by total acquisition cost (price + SDLT + legals + refurb). Net yield is what serious investors compare against, because it reflects what you actually clear after costs.

It varies massively by region. London 1-bed flats often run 4–5% gross yield. Yorkshire / North East terraces can hit 8–9%+. As a rough rule, anything below 5% gross is hard to justify on cashflow alone (you're betting on capital growth); 6–8% is the sweet spot for most BTL strategies; 9%+ is typically lower-quality stock or higher-risk areas. Net yield is usually 1.5–2.5 percentage points lower than gross.

Standard operating costs are: void allowance (2-4 weeks/year typical), letting agent management (8-12% of rent), maintenance reserve (5-10% of gross), landlord insurance (£150-400/year), and ground rent or service charge if leasehold. Mortgage costs are usually excluded from yield itself but are central to monthly cashflow.

Yield-on-cost — denominator is purchase price plus SDLT, legals, survey and refurb. This is the UK industry standard among serious operators because the all-in cost is what your capital actually buys. Yield-on-price flatters higher-cost deals (e.g. additional dwelling SDLT, big refurbs) and isn't comparable across buyer types.

Because operating costs eat into rent before you see a penny. A 7.0% gross yield with 10% management, 5% maintenance, 3 weeks void, £300 insurance and the SDLT/legal/refurb stack typically nets out around 5.0–5.5%. The 1.5-2 point gap is normal. Anyone quoting a property's yield without specifying gross or net is signalling either novice or sales pitch.

No — yield by convention is independent of finance. Mortgage rate, LTV and repayment type affect monthly cashflow, not yield. PropQuant's full deal analyser handles cashflow, ICR, stress tests and the offer price you can defend — the yield calculator on this page is one slice of that.

Break-even rent is the monthly rent at which net annual income equals zero — i.e. operating costs eat all the rent. It's a useful sanity check: if your assumed rent is close to break-even, the deal has no margin for an above-average void or rate rise.