Rental yield calculator
Gross yield is the number agents quote. Net yield is the one that matters. This shows both, with voids and running costs taken off.
How this is calculated
Gross yield is annual rent divided by the total invested, which here includes buying costs rather than just the purchase price. Quoting gross yield against the headline price alone flatters the number.
Net yield takes the void allowance off the rent first, then deducts the agent fee, maintenance, insurance, service charge and other running costs.
The agent fee is calculated on rent actually collected, so it falls during a void rather than being charged on a full year.
Mortgage interest is deliberately excluded, so the yield reflects the property rather than how you financed it. Tax is also excluded, and since 2020 landlords receive only a basic rate credit on mortgage interest rather than full relief.
Rates used · 2026/27
| Gross yield | annual rent divided by total invested |
| Net yield | after voids and running costs, before finance and tax |
| Typical void allowance | one month, about 8% |
| Mortgage interest and tax | not included |
Last checked July 2026. Source: HMRC and gov.uk.
Worked example
A £180,000 property with £9,000 of buying costs, let at £950 a month, shows a 6.03% gross yield. Allow one month of voids, a 10% agent fee, £900 maintenance, £280 insurance and £250 of compliance, and net income falls to £8,009, a net yield of 4.24%.
Common questions
Why is my net yield so much lower than gross?
Because gross ignores voids, agent fees, maintenance, insurance and compliance costs. The gap between the two is the real cost of being a landlord.
Should buying costs be included in the price?
Yes, if you want the return on what you actually spent. Stamp duty and legal fees are capital you have committed and will not get back.
Why is mortgage interest excluded?
So the figure describes the property rather than your financing. Add finance separately if you want the return on your own cash rather than on the asset.
What about tax?
Not included. Rental profit is taxable, and since 2020 mortgage interest attracts only a basic rate tax credit rather than full relief, which changed the maths considerably for higher rate taxpayers.