Where in the UK Has the Best Buy-to-Let Yields in 2026?

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.

These are gross figures before costs. The point of the table is to show relative positioning across markets, not to suggest any specific purchase decision.

For the current official averages rather than indicative ranges, RealYield now publishes a yield page for every local authority in England and Wales. Each one is computed from ONS rents and Land Registry prices and updated monthly. See Newcastle upon Tyne, Manchester, Liverpool and Nottingham, or compare all areas ranked by yield.

Why Northern Cities Yield More

Purchase price is the primary driver. Gross yield is a ratio, and the denominator is what differs most between north and south.

In January 2026, the average property price in Liverpool was £182,000 (ONS provisional). Newcastle stood at £207,000. Leeds at £246,000. Cardiff averaged £268,000 and Bristol's typical buy-to-let entry price is considerably higher still. Rents in northern cities are lower in absolute terms, but the purchase price gap is proportionally larger. That asymmetry drives the yield differential.

Tenant demand in major northern cities is also structurally supported. Manchester, Leeds, Liverpool, Nottingham, and Sheffield each have large student populations and growing professional rental markets. Regeneration investment provides further support. Northern Powerhouse infrastructure spending and the HS2 programme have reinforced employment growth in several northern city centres, which feeds rental demand over the medium term.

Rental growth has also been running fastest in the north. ONS data to February 2026 shows North East rents rising 7.6% annually, the fastest of any English region. Liverpool recorded 6.6% growth in the 12 months to February 2026. The North West as a whole grew at 5.7%. London rental growth was 1.7% over the same period.

Part of this pattern reflects affordability constraints. Southern rents have hit a ceiling for many tenants, while northern rents have more room to move before hitting similar affordability limits. Outside London, rent as a share of single gross earnings ran at around 33.5% in early 2026 (Zoopla), suggesting the wider market remains manageable even with continued modest growth.

Demand and Void Risk Are Not the Same Thing

A city with strong average rental demand can still contain sub-markets with elevated void risk. Understanding both matters.

Nationally, the average void period between tenancies is around 20-22 days (Goodlord Rental Index, 2026). In the North East, average voids have stretched to around 26 days, above the national figure. That does not mean northern properties are inherently harder to let. It means there is spread within the region. Well-located properties in high-demand postcodes let quickly. Properties in less connected areas or that need work take longer.

Student-heavy markets follow a specific pattern. Nottingham, Sheffield, and parts of Leeds have substantial student tenant bases. These markets offer reliable occupancy during the academic year and a predictable tenant pipeline, but summer voids are a structural feature. If your property caters primarily to students, your void allowance needs to reflect this: typically 4-6 weeks over summer rather than the 2-3 weeks used as a general estimate for professional tenancies.

Zoopla's March 2026 Rental Market Report showed national rental demand down 14% year on year, with supply up 11%. That represents a meaningful shift from the acute shortage conditions of 2022-2024. Properties are taking slightly longer to let on average and landlords have less pricing power than two years ago. Good properties in well-connected city-centre locations continue to let quickly. The properties facing difficulty are those in secondary locations competing against a larger supply than they faced before.

This is worth factoring into any assessment of yield data. A city average yield figure includes both the strong-demand postcodes and the ones that sit on the market longer. The micro-market matters as much as the city-level number.

What to Do With This Data

Regional yield data gives you a benchmark. It tells you where to look, not what to buy.

Before you can treat any of these figures as relevant to a specific deal, you need to model the full costs. A 7.5% gross yield in Nottingham with a 75% LTV mortgage at 5.5% does not automatically produce positive cashflow. Apply mortgage interest, agent fees at 12%, a void allowance of 4%, maintenance at 1.5% of property value, and your marginal tax rate under Section 24, and the number changes considerably.

For higher-rate taxpayers holding in personal name, Section 24 creates a particular squeeze. You are taxed on gross rental income, with mortgage interest replaced by a 20% basic-rate tax credit. At a 40% marginal rate, the effective mortgage cost after tax relief is meaningfully higher than the headline interest rate suggests. This affects northern properties just as much as southern ones. Higher gross yield does not insulate you from Section 24.

For a full worked example of how current mortgage rates affect affordability and the ICR stress test, see BTL Remortgaging in 2026: How to Stress-Test Your Deal.

If you are weighing whether a specific property is worth holding or buying given all costs and tax, Hold or Sell? How to Decide When a Buy-to-Let Is No Longer Worth Keeping sets out a practical decision framework.

Practical Checklist

Before acting on any regional yield data:

• Research the micro-market, not just the city average. A 7% city average conceals a wide postcode range. Ask a local letting agent what recent demand has looked like in the specific area you are evaluating.
• Check current void data in that area. Ask how quickly similar properties have let in the past six months and whether asking rents have been achieved or reduced.
• Calculate net yield, not gross. Apply mortgage interest, agent fees, maintenance (budget 1-2% of property value per year), void allowance, insurance, and your marginal tax rate.
• Stress test at current rates. Use a 5.5% floor rate and 125-145% ICR depending on your tax position and lender, as covered in the remortgage stress test article linked above.
• Factor in stamp duty at purchase. Buy-to-let properties attract a 5% surcharge above standard SDLT thresholds.
• Consider distance management costs. Buying in a city 200 miles away with no local contacts typically means a fully managed letting service at 12-15% of rent. That reduces a 7.5% gross yield by roughly 1 percentage point before any other costs are counted.

For a detailed breakdown of how void periods affect annual income, Void Periods: What They Actually Cost and How to Reduce Them runs through the numbers clearly.

This article is for informational purposes only and does not constitute financial or investment advice. Tax rules and legislation change frequently. Always verify current rates with HMRC or GOV.UK and seek independent professional advice before making investment decisions.