Calculate gross and net rental yield for buy-to-let properties.
Enter the property value and rent
Use current market value (not purchase price) and realistic achievable monthly rent — check Rightmove and Zoopla for comparables.
Add letting agent and management fees
Letting agents charge 8-12% of rent, full management 12-15%. Tenant-find only is typically 1 month rent.
Include maintenance and voids
Budget around 1% of property value/year for maintenance and 2-4 weeks of void per year (4-8% of rent).
Add mortgage interest if applicable
Use the interest portion of repayments at the current BTL rate (~5-6% in 2025/26). For limited company SPVs, this is fully deductible.
Compare gross and net yield
Gross yield helps benchmark across postcodes. Net yield shows what you actually keep before tax.
Stress-test the ICR
Make sure rent covers 125-145% of mortgage interest at a 5.5-6% stress rate — the lender's minimum for a BTL mortgage.
After Section 24, the 5% SDLT surcharge, higher mortgage rates and 18%/24% CGT, UK buy-to-let returns in 2026 look very different to 2010. Here's the honest profitability picture with worked numbers
Direct buy-to-let or a UK REIT inside an ISA? Section 24, 5% SDLT surcharge, 24% CGT and management hassle versus PID dividends, no SDLT and full ISA shelter. Worked example on £200k.
What happens after you submit your Self Assessment return — refunds, balancing payments, amendments, HMRC enquiries, the SA302 for mortgages, and the 5-year record-keeping rule
Disclaimer: All results are estimates for guidance only and do not constitute financial, tax or legal advice. Always consult a qualified professional.