Where in the UK Has the Best Buy-to-Let Yields in 2026?
RealYield Team
Property Analyst
Gross yields have shifted significantly since 2021. High property prices in southern cities have compressed income returns in many markets, while northern and Midlands cities now show figures that are materially higher. This article maps the regional picture and explains what the numbers mean before you draw any conclusions.
One important note upfront: this article uses gross yield throughout. Net yield, after mortgage costs, agent fees, maintenance, voids, and tax, can be 3-4 percentage points lower. Gross yield tells you the starting point. The calculator link at the bottom of this page does the rest.
Gross Yield vs Net Yield: Why the Distinction Matters
Gross yield is simple: annual rent divided by purchase price, expressed as a percentage. No deductions, no costs applied. It gives you the raw income return relative to what you paid.
Net yield accounts for everything you actually spend. Mortgage interest (under Section 24, this is not a deductible cost for income tax if you hold property in personal name), agent fees at typically 10-15% for a managed service, maintenance, insurance, void periods, and ground rent or service charge on leasehold properties. These stack up considerably.
A property showing a 7.5% gross yield in Liverpool might net 3.8% after mortgage costs at current rates. A 4.5% gross yield in Bristol might net 1.8% once financing is applied. The gross-to-net gap is driven mainly by your mortgage rate and tax position. With BTL fixed rates averaging 5.46% for two-year deals and 5.77% for five-year deals as of early April 2026 (Moneyfacts), financing costs are significant.
Use the RealYield calculator to model net returns for any specific deal before making decisions based on the regional data below.
Regional Yield Data: Key UK Cities Compared
Figures are drawn from Zoopla and Rightmove listing data analysed by PropertyData and propertyinvestmentsuk.co.uk (March 2026), cross-referenced with ONS local authority house price data (January 2026, provisional) and the ONS Private Rent and House Prices bulletin (February 2026). Yield ranges represent typical buy-to-let properties in each city. Within any city there are postcodes significantly above and below these ranges.
| City | Typical gross yield | Approx 2-bed monthly rent | Annual rent growth |
|---|---|---|---|
| Newcastle | 7-9% | £850-950 | +4.5% (North East, Zoopla March 2026) |
| Leeds | 7-8.5% | £950-1,100 | +2-3% (Yorkshire) |
| Liverpool | 7-8% | £875-1,000 | +6.6% (Liverpool, ONS Feb 2026) |
| Nottingham | 7-7.5% | £800-950 | +2-3% (East Midlands) |
| Sheffield | 6.5-7.5% | £800-900 | +2-3% (Yorkshire) |
| Manchester | 6-7% | £1,050-1,200 | +3.2% (North West, Zoopla March 2026) |
| Glasgow | 5.5-7% | £900-1,050 | +1.7% (Scotland, Zoopla March 2026) |
| Birmingham | 4.5-5.5% | £850-1,000 | +1.7% (West Midlands, Zoopla March 2026) |
| Cardiff | 4-5.5% | £875-1,000 | +5.5% (Wales, ONS Feb 2026) |
| Bristol | 3.5-4.5% | £1,200-1,500 | ~2% |
UK average gross yield: approximately 7% (Q4 2025, industry estimates). North East regional average: around 8.1% (Rightmove 2025 data). London: typically 3-4.5% depending on property type.
Frequently Asked Questions
Which UK city has the highest buy-to-let yields in 2026?
Newcastle and Leeds consistently record the highest gross yields of the major UK cities, typically in the 7-9% range for standard buy-to-let properties. Nottingham and Liverpool also feature strongly at 7-8%. These figures are gross yields before costs; net yields after mortgage interest, agent fees, voids, and tax are typically 3-4 percentage points lower depending on your specific deal.
What is the average gross rental yield in the UK in 2026?
The UK average gross yield for buy-to-let properties was approximately 7% as of Q4 2025, based on industry estimates. There is significant regional variation: the North East averages around 8% while London sits in the 3-4.5% range. The figure varies by data source and methodology.
Why do northern UK cities have higher buy-to-let yields than southern ones?
Gross yield is annual rent divided by purchase price. Northern property prices are materially lower than southern prices, while rents are lower by a smaller proportion. That asymmetry pushes yields higher. Liverpool averaged £182,000 as a property price in January 2026 (ONS provisional); the equivalent property in Bristol or London costs considerably more while not generating proportionally higher rent.
What is the difference between gross and net yield on a rental property?
Gross yield is annual rent divided by purchase price, before any costs. Net yield deducts mortgage interest, agent fees, maintenance, insurance, void periods, and tax. A 7% gross yield on a buy-to-let with a 75% LTV mortgage at current rates (around 5.5%) can easily become 3-4% net after all costs and Section 24 tax treatment.
Is a 7% gross yield good for buy-to-let in 2026?
7% gross sits above the current UK average and would be considered strong in most markets. Whether it translates to a good net return depends on your mortgage rate, tax position, and costs. At current BTL mortgage rates and under Section 24, a 7% gross yield on a leveraged property in personal name can deliver a modest net return or even negative cashflow for higher-rate taxpayers. Always model the full numbers.
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