Is 6% a good rental yield?

Yes. A 6% net yield is a healthy return in much of the UK and sits in the strong 5% to 8% range. As with any yield, weigh it against the area, the running costs and the prospects for the property to rise in value.

Is 12% a good rental yield?

A 12% yield is high. You do see figures that high in some lower-priced areas, but it is worth checking it holds up once voids, maintenance and management are counted, and that demand in the area is steady. A very high headline yield can reflect a higher-risk property.

The 2% rule is a US rule of thumb that the monthly rent should be at least 2% of the purchase price. It is rarely achievable in the UK, where yields are lower, so treat it as a rough screen rather than a target you should expect to hit.

Is a higher yield always better?

Not on its own. A very high yield often comes with lower property prices, slower capital growth, or higher running costs and tenant turnover. A slightly lower yield in an area where values are rising can leave you better off overall. Look at yield alongside the wider picture rather than chasing the biggest number.

What is the difference between gross and net yield?

Gross yield is the annual rent as a percentage of the price, before any costs. Net yield takes off the running costs first, so it reflects what you actually keep. Net is the figure to plan around, because gross can look generous until the costs come out.

How do I work out rental yield?

Divide the annual rent by the property price and multiply by 100. So £12,000 of rent on a £200,000 property is 12,000 ÷ 200,000 × 100, which is a 6% gross yield. For the net yield, take your annual running costs off the rent before you divide.

What costs should I include in the net yield?

The recurring costs of letting the property: letting or management fees, maintenance and repairs, landlord insurance, ground rent or service charges where they apply, and an allowance for empty periods between tenants. Mortgage interest is a real cost too, but it is usually looked at separately because it depends on how you funded the purchase.

Does rental yield include capital growth?

No. Yield only measures the rental income against the price. Any rise or fall in the value of the property is separate, and for many landlords it matters just as much as the yield over the long run.

What is a good rental yield? | UK benchmarks

A good rental yield in the UK is usually a net return of around 5% to 8%, though it varies a lot by area. Rental yield is the annual rent as a percentage of the property price: gross yield is the rent alone, net yield is after running costs. The net figure is the one to plan around.

The short version

Rental yield = annual rent ÷ property price × 100.
Gross yield is the rent alone; net yield is after running costs.
A net yield of roughly 5% to 8% is strong in much of the UK.
A high yield is not automatically better; weigh it against growth, costs and the area.

What rental yield is

Rental yield turns the rent a property earns into a percentage of its price, so you can compare very different properties, or a property against other investments, on the same footing.

It is a quick, useful measure, but it is only one part of the story. Yield says nothing about whether the property will rise in value, how reliable the rent will be, or how much hassle the property is to run. Treat it as the starting point for a closer look, not the final verdict.

How to work out rental yield

Both figures start from the same simple sum. For the gross yield, divide the annual rent by the property price and multiply by 100. For the net yield, take your annual running costs off the rent first.

Gross yield = annual rent ÷ price × 100
Net yield = (annual rent - running costs) ÷ price × 100

So a £200,000 home let for £1,000 a month earns £12,000 a year, a 6% gross yield. Knock off £2,400 of running costs and the net yield is 4.8%. The rental yield calculator works out both from your own figures.

Gross vs net yield

Gross yield is the rent against the price, before any costs. It is the figure you will see quoted most often because it is simple, but it flatters the return. Net yield takes off the running costs first, so it is a truer picture of what lands in your pocket.

The gap between the two is the cost of running the property: letting fees, maintenance, insurance, and the months a property sits empty between tenants. On a typical let those can knock a percentage point or more off the gross figure, which is why a deal that looks strong on gross yield can be ordinary once you net it down.

What counts as good

There is no official figure, but these net-yield ranges are a reasonable rule of thumb for the UK.

Net yield	What it tends to mean
Below 3%	Low; little buffer once costs and any mortgage are paid
3% to 5%	Modest; common in higher-priced areas
5% to 8%	Strong; a healthy return in much of the UK
Above 8%	High; check the area, condition and costs are realistic

Why it varies by area

Yields are not the same across the country, because rents and prices do not move in step. Lower-priced areas, often in the north of England, Scotland and parts of Wales, tend to show higher yields, since the rent is high relative to a modest price. Pricier areas, especially in London and the south east, often show lower yields but a longer history of values rising.

That trade-off, income now against growth later, is at the heart of a lot of buy-to-let decisions. A high yield in a flat market and a low yield in a rising one can end up in much the same place once you count both the rent and any change in value.

How to improve your yield

Buy well. The price you pay is half the sum, so a keener purchase lifts the yield from day one.
Keep it let. Empty months are pure cost. Good tenants who stay, and a quick turnaround when they leave, protect the net yield.
Control the costs. Shop around on management and insurance, and stay on top of maintenance so small jobs do not become big ones.
Review the rent. Letting the rent drift below the local market quietly erodes the yield; a fair review in line with the market keeps it on track.

If you are borrowing to buy, weigh the yield against the cost of the loan. Our mortgage repayment calculator shows the monthly payments, which come straight off your real return.

Common questions

What is a good rental yield?: As a rough guide, a net yield of around 5% to 8% is considered strong across much of the UK. Below 3% leaves little room once costs and any mortgage are paid, while above 8% is worth a second look to check the area, the condition of the property and that the costs are realistic.
Is 6% a good rental yield?: Yes. A 6% net yield is a healthy return in much of the UK and sits in the strong 5% to 8% range. As with any yield, weigh it against the area, the running costs and the prospects for the property to rise in value.
Is 12% a good rental yield?: A 12% yield is high. You do see figures that high in some lower-priced areas, but it is worth checking it holds up once voids, maintenance and management are counted, and that demand in the area is steady. A very high headline yield can reflect a higher-risk property.
What is the 2% rule?: The 2% rule is a US rule of thumb that the monthly rent should be at least 2% of the purchase price. It is rarely achievable in the UK, where yields are lower, so treat it as a rough screen rather than a target you should expect to hit.
Is a higher yield always better?: Not on its own. A very high yield often comes with lower property prices, slower capital growth, or higher running costs and tenant turnover. A slightly lower yield in an area where values are rising can leave you better off overall. Look at yield alongside the wider picture rather than chasing the biggest number.
What is the difference between gross and net yield?: Gross yield is the annual rent as a percentage of the price, before any costs. Net yield takes off the running costs first, so it reflects what you actually keep. Net is the figure to plan around, because gross can look generous until the costs come out.
How do I work out rental yield?: Divide the annual rent by the property price and multiply by 100. So £12,000 of rent on a £200,000 property is 12,000 ÷ 200,000 × 100, which is a 6% gross yield. For the net yield, take your annual running costs off the rent before you divide.
What costs should I include in the net yield?: The recurring costs of letting the property: letting or management fees, maintenance and repairs, landlord insurance, ground rent or service charges where they apply, and an allowance for empty periods between tenants. Mortgage interest is a real cost too, but it is usually looked at separately because it depends on how you funded the purchase.
Does rental yield include capital growth?: No. Yield only measures the rental income against the price. Any rise or fall in the value of the property is separate, and for many landlords it matters just as much as the yield over the long run.

About this article

Written by the calcd team. We build UK money calculators and explain the numbers behind them in plain English. Rental yield is plain arithmetic rather than a fixed rate, so there is no statutory figure to quote; we checked the general points and the benchmark ranges against MoneyHelper and UK letting guides. The worked examples here are estimates to help you compare, not financial advice. Last updated June 2026.

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