Gross yield is the number agents quote. Net yield and monthly cash flow after tax are the numbers that decide whether the property is worth keeping. This works both out from your own figures.
Defaults are national averages; change any of them.
Enter 0 if there is no mortgage.
Interest-only. Repayment mortgages pay down capital too, which is not a cost but does reduce cash flow.
£150 to £400 for buildings cover on a typical house. What you should pay.
Gas check, EICR, EPC and legionella spread over their validity. Price yours.
Flats only.
Individuals get a 20 percent tax credit on mortgage interest rather than a deduction (Section 24).
Gross yield is annual rent divided by the property value. Net yield takes off the running costs you entered (agent fee, insurance, maintenance, certificates, service charge and the rent lost to voids) but not the mortgage, so you can compare properties regardless of how they are financed. Cash flow then deducts mortgage interest. Tax is worked out the way HMRC does it for an individual: taxable profit is rent minus running costs with no interest deduction, tax at your marginal rate, then a credit of 20 percent of the interest (capped at the tax due on the property profit). Return on cash is post-tax cash flow divided by your equity (value minus mortgage), which is the honest comparison with a savings account.
| Cost | Typical | Share of rent |
|---|---|---|
| Letting agent, fully managed | £1,730 a year | 12 percent |
| Repairs and maintenance | £1,440 a year | 10 percent |
| Voids, 2 weeks | £550 a year | 4 percent |
| Landlord insurance | £280 a year | 2 percent |
| Certificates and compliance | £200 a year | 1.4 percent |
| Total before mortgage and tax | £4,200 a year | 29 percent |
Costs from the calculators on this site and insurer price data, 2026. Self-managing removes the largest line but adds your own time and the compliance risk.
Gross yields average about 5.5 percent across England, with 7 to 9 percent common in the North East, parts of Yorkshire and the North West, and 3.5 to 4.5 percent in London and the South East. Net yield before finance is typically 1.5 to 2.5 points lower.
Usually mortgage interest plus Section 24. At a 5 percent rate a 60 percent loan-to-value mortgage costs 3 percent of the property value a year in interest, and a higher-rate taxpayer pays tax on the rent before that interest is allowed for. The calculator shows both the pre-tax and post-tax figure so you can see which one bites.
Not in yield. Growth is real but uncertain and taxed on sale. Judge the property on cash flow and treat growth as the upside.
It changes voids and rent rises. Tenants can now leave on 2 months' notice at any time, so a 2-week void assumption is optimistic for some areas, and rent can rise only once a year by section 13 notice with 2 months' notice. Our cost guide to the Act puts figures on each change.
In order of effect: self-manage or negotiate the agent fee, bundle certificates, shop the insurance each year, cut voids with a fair rent and quick turnaround, and fix the EPC before 2030 so it does not become a forced spend. The tools above price each one.
A company deducts all mortgage interest and pays corporation tax at 19 to 25 percent, but company mortgage rates are higher, moving existing property in triggers stamp duty and capital gains tax, and taking money out is taxed again. It suits higher-rate landlords buying new properties more than existing portfolios. Take advice.