The average rental yield in the UK is between 5-6%, with yields of 7-8% considered good. As of 2024, cities like Glasgow (7.67%), Aberdeen (7.15%), and Manchester (6.07%) are leading in rental yields, driven by high demand and urban regeneration projects.
Understanding these dynamics is crucial for property investors seeking profitable opportunities.
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What is a good rental yield in the UK?
An average rental yield in the UK is between 5-6%; if it is between 7-8%, we consider it a ‘good rental yield.’ If the yield is lower than that mark you might not have enough cash flow in the property to cover its running costs, mortgages, and other unforeseen expenses.
Finding a good rental in the UK is essential to property investors. It allows you to compare the potential returns from different properties and determine the most profitable. Rental yield also indicates the demand for rentals and the potential for an increase in rent in different areas.
Which city in the UK has the highest rental yield?
Aberdeen, Glasgow, and Manchester have the highest rental yield in the UK in 2024. The average monthly rent in Aberdeen is £834, which is 6.5% higher than last year, and its average house prices have increased by 6.2%, leading to increased rental yields.
Such changes are also seen in Glasgow and Manchester. Several other cities in the UK have average gross rental yield between 5-7% which is considered a good yield, making the UK a suitable place for property investors.
How to work out rental yield in the UK?
Two ways exist to determine rental yield in the UK for any investment property. You can calculate either the gross or net rental yield in the UK.
- Gross rental yield
You can calculate your property’s gross rental yield by dividing your annual rental income and dividing it by the property market price.
Gross rental yield = (annual rental income/property price) × 100
For example,
If you purchase a property with £300,000 and your monthly rental income is £2000, so your rental yield is
((£2000×12)/£300,000)×100 = 8%
- Net rental yield
To calculate the net rental yield, divide your yearly rental income by the property purchase price and expenses.
Rental yield = [(monthly rent × 12) ÷ (Property price+ expenses)] × 100
For example,
If you buy a property that can be rented out at £500, it will give you a yearly rental income of £6000
Now, if the property price is £100,000 and you need to spend £5000 on refurbishments, your rental yield will be
£6,000 ÷ (£100,000 + £5,000) × 100 = 5.71%
Highest buy-to-let rental yields for 2025 in the UK
Below are the top 10 highest buy-to-let rental yield areas for 2025 in the UK
| City | Average gross rental yield | Average monthly rent | Average house price |
| Sunderland | 5.13% | £641 | £150,000 |
| Aberdeen | 7.15% | £834 | £140,000 |
| Burnley | 6.01% | £586 | £117,000 |
| Dundee | 6.66% | £822 | £148,000 |
| Glasgow | 7.67% | £1196 | £187,000 |
| Middlesbrough | 5.26% | £636 | £145,000 |
| Liverpool | 5.17% | £810 | £188,000 |
| Leeds | 5.30% | £1100 | £249,000 |
| Nottingham | 5.61% | £940 | £201,000 |
| Manchester | 6.07% | £1279 | £253,000 |
Why are these areas having higher rental demands?
- Glasgow
Average gross rental yield: 7.67%
Average monthly rent: £1196
Average house price: £187,000
The average rental yield in Glasgow is higher than most other cities in the UK because of the rising rental demand from young professionals and students. Also, the city is undergoing multiple regeneration projects that improve living conditions, transportation facilities, and public spaces, attracting tenants. You can find two international airports, an extensive rail network, and significant road connections in the city.
- Aberdeen
Average gross rental yield: 7.15%
Average monthly rent: £834
Average house price: £140,000
Aberdeen is one of the cheapest places in the UK to buy properties and use them for rental purposes. The growing employment in the city and the increasing student population have significantly increased the demand for rental properties in the area. Renters mainly look for one and two-bedroom flats with proximity to a wide range of amenities and transportation facilities.
- Manchester
Average gross rental yield: 6.07%
Average monthly rent: £1279
Average house price: £253,000
Increased job opportunities, limited housing supply, urban regeneration projects, and improved transportation networks are reasons that increased Manchester’s rental demand. The city attracts significant businesses like Amazon, BBC, and Kellogg’s, establishing itself as a prime destination for job opportunities and attracting young professionals. The rental demand will further increase with the completion of regeneration projects like the Old Trafford Stadium, NOMA, Retail Park Redevelopment, Wythenshawe Town Centre, and the Green Heart of Ancoats.
- Nottingham
Average gross rental yield: 5.61%
Average monthly rent: £940
Average house price: £201,000
The rental demand in Nottingham is mainly because of its large student population and contract workers at city hospitals, and major companies. Lenton and Dunkirk get the highest rental demands from students of the University of Nottingham, and the Arboretum district is popular with Nottingham Trent University students. Some of the lowest-priced housing is found in the Inner City, except the Radford and Lenton districts.
- Leeds
Average gross rental yield: 5.30%
Average monthly rent: £1100
Average house price: £249,000
Leeds is said to be the second-largest financial hub in England, attracting professionals from across the UK and beyond. With the city’s rapidly increasing student young professionals population, the housing market struggles to meet their requirements, leading to increased rental demands. The availability of better transportation, educational facilities, and ongoing public projects are the primary reasons for an increased rental population in the city.
Is Buy to let Property in the UK a Good Investment?
Yes, Buy to let property in the UK is a good investment. It allows you to earn in two ways. You can rent property to earn a regular income and sell it when market prices rise. As the average rents increase significantly in the UK, there is a potential for higher rental demands in the coming years. On the other hand, property prices show long-term capital appreciation offering potential for capital growth for investors.
Is renting out property in the UK worth it?
Yes, renting out property in the UK is worth it as it provides an additional income source on top of your monthly salary. The demand for rental properties in the UK is high, especially among young professionals and families, as property prices keep rising.
According to Savills Research, mainstream UK house prices will grow by 5% in 2025, and in the next five years, we will see a rise of over 23.4%. However, rents are expected to reach an affordability ceiling, which means rental growth. It is the best time for property investors to rent out their property.
How to find the best rental yield areas in the UK?
To find the best rental areas in the UK, you must thoroughly analyze the market, check government websites, and follow rental stats. Choosing the right property investment in the UK required considering multiple factors, such as
- Identifying your target tenant demographics
- Calculating the average monthly rent of different areas
- Looking for the best facilities and location of the properties
- Understanding the tax compliances of different districts
With Pluxa Property, you have nothing to worry about. Our experience in the UK property market is over 5 years, and the team is ready to assist you in finding the best properties to ensure regular tenant flow. We don’t settle for less and always aim to give investors higher returns than their investments.
How Pluxa Property can help you in UK property investment
- Source best property deals
We understand how important the location of a property is in rental demands. Therefore, we consider all your requirements and burdens to help you source the best property deals in the UK.
- Negotiate terms
Pluxa Property helps property investors in purchasing properties at lower market prices. We aim to increase your returns while reducing your investment.
- Refurbish properties
Not all properties are ready to rent, as the target tenants differ. We assist in refurbishing properties, managing conversions of large houses into rental accommodations, and transforming smaller homes into luxury flats.
- Find tenants
We also help you find tenants and reduce property void periods, as it can negatively impact your returns. Pluxa Property markets your buy-to-let properties on different platforms to regularly keep the bookings up to almost 100%.
- Assist with investment planning.
Our team understands your needs and other financial constraints to evaluate which investment plan works best for you. This simplifies the property buying process in the UK. The service is non-chargeable, but you may need to pay a 5% deposit for completed or off-plan properties.
Peter Juhasz is the founder of Pluxa Property, the biggest property investment company in UK and Group CEO of AIP Capital Group and a property investment expert with over a decade of experience in the UK market.
He built a successful property company using innovative cashflow strategies like Serviced Accommodation and HMOs, scaling to 200 units in four years.
Peter leads a team specializing in property and business acquisitions across various sectors. A former co-host of “Cashflow With Property,” he shares his expertise in real estate investing and business scaling.
He is committed to continuous learning and helping SME owners and investors maximize their returns, driven by his passion for empowering others to achieve their financial goals.
To learn how Pluxa Property can help you in UK property investment, contact our experts.
