Buy-to-Let Yield & Profit Calculator

Buy-to-Let Guide 2024

Gross vs Net Yield

Gross yield = (annual rent / property value) × 100. Quick first filter — but ignores all costs. Example: £200k property, £1,100 monthly rent. Gross yield = £13,200 / £200,000 = 6.6%. Healthy gross yield bands: northern UK and Wales: 7-10% achievable. Midlands: 5-7%. South East: 4-6%. Central London: 3-5%. Net yield = ((annual rent − annual costs) / property value) × 100. Costs include: management, maintenance, insurance, ground rent, service charges. Net yield typically 2-3 percentage points bel

Section 24 — The Mortgage Tax Restriction

Before 2017: BTL mortgage interest was fully deductible from rental income. After Section 24 (phased 2017-2020): mortgage interest no longer deductible. Instead, 20% tax credit on mortgage interest. Brutal impact for higher-rate taxpayers: 100% of rent counted as income (after non-mortgage costs). Only 20% credit on mortgage interest. Effective tax rate on rent: up to 75% in extreme cases. Limited company structure: limited companies still get full mortgage interest deduction. Many higher-rate l

Other Costs to Plan For

Letting agent fees: full management 10-15% of rent. Tenant find only: typically 1 month's rent. Maintenance: rule of thumb 10% of rent for general maintenance. New roof, boiler replacement, big repairs increase this significantly. Void periods: assume 1 month per year unoccupied. Particularly in higher-yield areas with more tenant turnover. Service charges and ground rent: flats only. Can be £1,000-3,000/year. Cladding-affected buildings can have catastrophic service charges. Insurance: £200-500

Current Market Pressures

Significant headwinds since 2020: mortgage rates rose from ~2% to 5%+. Section 24 fully active. Renters Reform Bill (when enacted) — abolishes Section 21 'no-fault' evictions. Energy efficiency: properties below EPC C may not be lettable from 2028 (proposed). Retrofit costs £5,000-25,000 for older properties. Capital growth: London essentially flat since 2016. Northern cities (Manchester, Leeds, Liverpool) have outperformed. BTL profitability: many older portfolios are barely cash-flow positive