UK Buy-to-Let Calculator
Calculate gross and net yield on a UK rental property after agency fees, maintenance, and void periods. Free, privacy-first — inputs never leave your browser.
Details
Result
Net Yield
5.52%
Gross Yield
6.72%
Annual Rent
£16,800
Annual Net Income
£13,800
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
What yield should you aim for?
- Gross yield = annual rent / purchase price. Simple but ignores costs.
- Net yield = (annual rent − annual costs) / purchase price. The real picture.
Rule of thumb for UK BTL: gross yield above 5% is healthy, above 7% is strong, below 4% typically needs significant capital appreciation to justify.
Costs BTL landlords often forget
- 5% SDLT surcharge on purchase
- Lettings agent fees: 8-15% of rent
- Maintenance reserve: 1% of property value/year
- Void periods: 4-8% of rental income
- Mortgage interest (now only 20% tax credit, not full deduction)
- Buildings & landlord insurance
- Annual gas safety, EICR, accountant fees
Common questions about Buy-to-Let
What is a good rental yield?+
London 3-5%. North of England 5-8%. Scotland 6-9%. A "good" yield is one that covers mortgage + costs with margin. Below 4% gross — reconsider unless for capital growth.
What costs to factor in?+
Mortgage interest, letting agent (8-15% of rent), annual maintenance (1% of property value), insurance, ground rent, voids (4-8% of annual rent), accountant, safety certificates.
How is buy-to-let income taxed in 2026?+
Rental income after allowable expenses is added to your total income and taxed at 20/40/45%. Crucially, Section 24 (fully phased in from 2020) restricts mortgage interest relief to a 20% tax credit (no longer fully deductible from rental income). This pushes many higher-rate landlords into an effective tax rate above 50% on the gross rent. Personal ownership hit hardest; limited company structures (SPV) may be more tax-efficient for portfolios generating £30k+ rental profits.
What is the 5% additional SDLT surcharge?+
Since 31 October 2024, a 5% SDLT surcharge (up from 3%) applies on top of standard rates when buying an additional residential property (second home, buy-to-let, holiday home) priced £40,000+. On a £300k BTL, extra SDLT is £15,000 on top of the standard ~£2,500 — £17,500 total. The surcharge is refundable if you sell your previous main home within 36 months. Factor this into purchase budgets.
Should I buy BTL personally or via a limited company?+
Depends on scale and income. Limited company (SPV): full mortgage interest deductible as expense, 19%-25% corporation tax on profits, dividends taxed separately when drawn. Works well for higher-rate taxpayers building portfolios of 3+ properties. Personal: simpler, no running costs (~£500-£1,500/year for company accounts), all rental profits flow to personal tax return. For single BTL in basic-rate hand, personal often wins. Get specialist tax advice before deciding.
What is the 145% interest coverage ratio (ICR)?+
Lenders use ICR to test whether rental income adequately covers mortgage interest. Standard requirement: rental income must be 125%-145% of mortgage interest at a "stress rate" (~5.5%-8%). Higher for higher-rate taxpayers (145%) and limited company SPVs (125%). Example: £800/month rent must cover mortgage interest of ~£550/month maximum at 145% ICR. Lower LTV (60-65%) and 5-year fixed rates often pass ICR more easily than high-LTV variable loans.