Landlord Rental Yield Calculator

The tool matches your postcode to its UK LAD (Manchester, Outer London, Leeds, etc.) to pull the right rent benchmark, void rate and yield distribution. Purchase price includes anything you’ll capitalise (property + legal fees + refurbishment) — but NOT stamp duty, which is a separate one-off cost.

Property type drives maintenance costs (detached 1.2%, flat 0.8% of value/year). Bedrooms determine which ONS rent median we benchmark against. If you’re buying a flat, add service charge + ground rent manually as these are NOT modelled here.

Check SpareRoom, Rightmove or Zoopla for equivalent 2-bed (or whatever) listings in the same postcode. If your figure is more than ±25% off the LAD median, the tool will warn you — re-check your comparables.

LTV is usually 60–75% for BTL (lenders rarely go above 80%). Interest rate should be what you can actually get today — check Mortgage Broker Tools or L&C. Most BTL mortgages are interest-only, which matches this tool’s assumption.

Individual or partnership → Section 24 applies. Limited company (SPV) → full interest deduction, no Section 24. If individual, pick your marginal tax bracket — this determines the Section 24 impact (basic rate = nil, higher = 20% of interest, additional = 25%).

Net yield is your annual % return after all costs. The LAD percentile shows where you rank locally (aim for P50+). The expense pie chart shows where your money goes — if mortgage interest + Section 24 is more than 50% of the pie, a lower LTV or a Ltd structure would help materially.

£200k property at 75% LTV and 5.5% rate = £8,250/year mortgage interest. Pre-2017 rules: interest was a deductible expense, reducing taxable rental profit by £8,250. Now: you pay income tax on the full rental profit (no interest deduction) and receive a 20% × £8,250 = £1,650 tax credit. A higher-rate (40%) payer effectively pays an extra £1,650/year in tax. An additional-rate (45%) payer pays £2,063/year extra.

An SPV pays Corporation Tax (19% below £50k profit, 25% above £250k, tapered between) on rental profit after full mortgage interest deduction. To extract cash: dividend tax (8.75% basic / 33.75% higher / 39.35% additional above the £500 allowance). For higher-rate landlords with 3+ BTLs, SPV is usually 10–25% more tax-efficient than individual ownership. Downsides: +0.3–0.7% on mortgage rate, limited product choice, and cumbersome share transfers for inheritance.

Lenders want stressed rent (at a notional pay-rate of 5.5% or initial + 2%, whichever is higher) to cover at least 125% of interest for basic-rate and 145% for higher-rate landlords. Worked example: borrow £150k at stress rate 5.5% = £8,250 stressed interest; higher-rate landlord needs annual rent ≥ £11,963 (£997/month). If your rent is lower, you can’t get the mortgage — you need to borrow less, find a cheaper property, or push rent higher.

Additional dwellings now attract 5% SDLT on top of standard rates. £250k property → £12,500 surcharge + £0–£2,500 standard = £12,500–£15,000. £500k → £35,000 surcharge + £15,000 standard = £50,000. Your breakeven period = SDLT ÷ annual net income. At 4% net yield and 5% SDLT, you need ~15 months of rent just to cover purchase tax before any real return starts.

Under current proposals, new tenancies need EPC C from April 2028; existing tenancies from 2030. Typical upgrade costs by property age: post-1990 → £1,000–£3,000; 1945–1990 → £3,000–£8,000; pre-1945 (Victorian/Edwardian) → £8,000–£15,000+ (external wall insulation, double-glazing, heat pump). On a £200k BTL this can be 4–7.5% of price — easily wiping out 1–2 years of net yield. Always check the EPC before agreeing a price.