The Danger of Headline Yield: Why Gross Yield is Misleading
RealYield Team
Property Analyst
If you've spent any time on property portals or talking to estate agents, you've heard the term "Gross Yield." It's the most common metric used to sell buy-to-let properties. It's also one of the most dangerous if used in isolation.
Gross yield is a simple calculation: (Annual Rent / Purchase Price) x 100.
While it's useful for a 10-second "back of an envelope" comparison, relying on it to make a final investment decision is a mistake that costs UK landlords thousands of pounds every year.
The "Perfect World" Problem
Gross yield exists in a perfect world—one where a property has no costs, no taxes, no mortgage, and is never empty.
It assumes low or no service charges, minimal maintenance, few voids, cheap management, and stable borrowing costs. For many UK landlords, particularly those with leasehold flats, that world does not exist.
Once service charges, ground rent, repairs, letting fees, void periods, and mortgage interest are taken into account, gross yield quickly loses its usefulness.
Related Insights
Rent or Buy? How to Compare the Real Costs in the UK
Comparing a mortgage payment with a rent cheque misses most of what actually decides the answer. Here's how to work out the real cost of renting against buying, with a worked UK example over 5 and 10 years.
UK Rents Rose 3.8%. Or 2.4%. Or 4.1%. Why Every Rent Figure You Read Is Different.
ONS, Hamptons and HomeLet all published August 2026 rent figures and they don't match. Here's what each one actually measures, and which one to trust for your own property.