How do you calculate rental yield?

Gross rental yield = (Annual Rent / Property Price) x 100. For example, a property costing £150,000 with monthly rent of £750 gives an annual rent of £9,000, so gross yield = (9,000 / 150,000) x 100 = 6.0%. Net yield subtracts costs like management fees, insurance, maintenance, and void periods before dividing by purchase price.

Which UK city has the highest rental yield?

As of 2026, Sunderland, Dundee, and Burnley consistently rank among the highest-yielding cities in the UK, with gross yields of 8-10%. Among major cities, Glasgow (6.5-8.5%), Liverpool (6-8%), and Manchester (5.5-7%) lead. However, the highest yields are often found in smaller towns and cities with lower average property prices.

Is a high rental yield always better?

Not necessarily. High yields often come from areas with lower property prices, which can mean slower capital growth, higher tenant turnover, and greater void risk. The best investment strategy depends on your goals - cash flow investors prioritise yield, while wealth builders may accept lower yields in areas with strong capital appreciation potential. A balanced approach considers both yield and growth.

What costs should I deduct to get net yield?

To calculate net yield, deduct: letting agent fees (8-12% of rent), landlord insurance (approximately £200-£400/year), maintenance and repairs (budget 10-15% of rent), void periods (typically 4-8% of annual rent), mortgage interest (if applicable), ground rent and service charges (leasehold properties), and licensing fees (HMO or selective licensing areas). Net yield is typically 2-3% below gross yield.

Data Rankings|7 April 2026

UK Rental Yield Rankings 2026 - Top 20 Cities

Which UK cities deliver the highest rental yields for buy-to-let investors? We rank the top 20 cities by gross yield using Land Registry price data and current rental market rates.

How We Calculated These Yields

Gross yield is calculated as: (Annual Rent / Average Property Price) x 100. Average property prices are sourced from Land Registry and ONS median house price data. Rental data is based on advertised rents from major portals, cross-referenced with ONS Private Rental Market Statistics. Yield ranges reflect variation across property types and postcodes within each city.

Note: these are gross yields. Net yields after management fees, insurance, maintenance, void periods and mortgage costs will be lower - typically by 2-3 percentage points. See our buy-to-let guide for a full cost breakdown.

Top 20 UK Cities by Rental Yield

#	City	Region	Avg. Price	Avg. Rent/mo	Gross Yield	Yield Range
1	Sunderland	North East	£125,000	£650	6.2%	6.0-10.0%
2	Dundee	Scotland	£135,000	£700	6.2%	5.5-9.5%
3	Burnley	North West	£78,000	£475	7.3%	7.0-9.5%
4	Glasgow	Scotland	£165,000	£850	6.2%	6.5-8.5%
5	Hull	Yorkshire	£128,000	£575	5.4%	6.5-8.0%
6	Blackpool	North West	£105,000	£525	6.0%	6.5-8.0%
7	Liverpool	North West	£175,000	£825	5.7%	6.0-8.0%
8	Bradford	Yorkshire	£120,000	£575	5.8%	6.0-7.5%
9	Stoke-on-Trent	West Midlands	£115,000	£550	5.7%	6.0-7.5%
10	Middlesbrough	North East	£130,000	£600	5.5%	5.5-7.5%
11	Hartlepool	North East	£98,000	£475	5.8%	6.0-7.5%
12	Newcastle	North East	£185,000	£825	5.4%	5.5-7.0%
13	Coventry	West Midlands	£210,000	£900	5.1%	5.5-7.0%
14	Nottingham	East Midlands	£195,000	£850	5.2%	5.5-7.0%
15	Leeds	Yorkshire	£215,000	£900	5.0%	5.5-7.0%
16	Manchester	North West	£240,000	£1,050	5.3%	5.5-7.0%
17	Sheffield	Yorkshire	£190,000	£800	5.1%	5.0-6.5%
18	Birmingham	West Midlands	£225,000	£925	4.9%	5.0-6.5%
19	Edinburgh	Scotland	£310,000	£1,250	4.8%	4.5-6.0%
20	Bristol	South West	£340,000	£1,300	4.6%	4.5-5.5%

Sources: Land Registry, ONS, Zoopla, Rightmove. Data as of Q1 2026. Yield ranges reflect variation across property types and postcodes.

Regional Analysis

North of England

The North dominates the top 10, with cities like Sunderland, Burnley, Hull, and Hartlepool delivering gross yields consistently above 6%. Low average property prices (£78,000-£185,000) combined with relatively stable rental demand from local employment centres drive these returns.

Liverpool andManchester offer the best combination of yield and capital growth potential among northern cities, with both benefiting from major regeneration programmes and growing professional tenant populations.

Scotland

Glasgow ranks 4th nationally with yields of 6.5-8.5%, making it the highest-yielding major UK city. Dundee also performs strongly at position 2. Scottish investors should note the different legal system (including the Private Residential Tenancy regime and potential rent controls) which can affect net returns.Edinburgh offers lower yields (4.5-6%) but stronger capital appreciation driven by constrained supply and international demand.

Midlands

Stoke-on-Trent and Coventry lead the Midlands, with Nottingham close behind.Birmingham sits at rank 18 with 5-6.5% yields - lower than northern cities but offering stronger capital growth potential through the Big City Plan regeneration and connectivity improvements.

South & London

Bristol is the only southern city in our top 20, at position 20 with yields of 4.5-5.5%.London falls outside the top 20 with average gross yields of 3.5-5%, though outer London boroughs like Barking, Dagenham, and Croydon can reach 5%+.

Southern and London investors typically prioritise capital growth over yield. A property purchased in a prime London location may deliver only 3.5% gross yield but historically outperforms on capital appreciation over 10+ year holding periods.

Yield vs Growth - Which Strategy Suits You?

Factor	High Yield Strategy	Capital Growth Strategy
Typical locations	Northern cities, Scotland, ex-industrial towns	London, South East, university cities
Gross yield	6-10%	3-5%
Capital growth (5yr)	10-20%	20-40%
Entry cost	£75,000-£175,000	£250,000-£500,000+
Cash flow	Positive from day one (often)	May be negative after costs
Best for	Income-focused, portfolio scaling	Wealth building, equity release
Key risk	Voids, tenant quality, slower appreciation	Negative cash flow, interest rate sensitivity

Tax Impact on Yields

Your after-tax yield depends heavily on your marginal tax rate and mortgage structure.Section 24 restricts mortgage interest relief to 20%, meaning higher-rate taxpayers pay income tax on rental income before deducting mortgage costs. This can significantly erode net returns on leveraged properties.

For higher-rate taxpayers with multiple properties, a limited company structure may preserve more of the gross yield by allowing full mortgage interest deduction against corporation tax (currently 25%).

When selling, capital gains tax at 18% (basic rate) or 24% (higher rate) applies to residential property gains above the annual exemption. Budget for this when calculating total returns.

How to Improve Your Rental Yield

Buy below market value: Auction properties, repossessions, and motivated sellers can offer 10-20% discounts, immediately boosting yield
Refurbish strategically: A well-renovated property commands higher rent - focus on kitchens, bathrooms, and EPC improvements
Consider HMO conversion: Letting by the room can increase gross income by 30-50% compared to single-let, though with higher management requirements
Negotiate mortgage rates: A 0.5% reduction in mortgage rate on a £150,000 property saves £750/year, directly improving net yield
Reduce void periods: Professional presentation, competitive pricing, and good tenant relationships reduce costly empty periods
Self-manage (if local): Cutting out agent fees (8-12% of rent) can add 1%+ to your net yield

Frequently Asked Questions

A gross rental yield of 5-8% is generally considered good for UK buy-to-let. The national average is approximately 4.5-5%. Northern cities and some Scottish cities regularly deliver 6-8%+, while London and the South East typically return 3-5% but with stronger capital growth potential. Net yield (after costs) is typically 2-3% lower than gross.

PropertyWiki Team

Editorial Team

Published: April 7, 2026

Updated: April 7, 2026

PropertyWiki's editorial team provides data-driven property market analysis and guides for UK buyers and investors.