Most buy-to-let guides tell you to research the local market and stop there. This one shows you the numbers.
Below are average prices, average rents and gross yields for eleven UK cities, followed by something you will not find in a yield table: the rent each of those cities needs to achieve before a lender will advance 75% of the purchase price.
The gap between those two figures is the most useful thing on this page, because it is solvable. Knowing which lever to pull – the structure, the product, the deposit or the property itself – is most of what separates a purchase that completes from one that stalls.
Buy-to-let yields by city in 2026
Average price, average rent and gross yield across eleven UK cities, with the UK average for comparison.
| City | Avg price | Price % | Avg rent | Rent % | Gross yield |
|---|---|---|---|---|---|
| Glasgow | £164,600 | +3.1% | £1,030 | +3.7% | 7.51% |
| Liverpool | £171,000 | +4.2% | £915 | +4.6% | 6.42% |
| Manchester | £239,900 | +2.7% | £1,167 | +1.6% | 5.84% |
| Nottingham | £204,700 | +1.0% | £992 | −0.8% | 5.82% |
| UK average | £272,800 | +1.3% | £1,319 | +1.9% | 5.80% |
| Sheffield | £180,200 | +2.2% | £861 | +0.9% | 5.73% |
| Leeds | £216,900 | +1.8% | £1,024 | +0.8% | 5.67% |
| Edinburgh | £284,700 | +1.9% | £1,323 | +2.0% | 5.58% |
| Birmingham | £217,100 | +1.8% | £998 | −0.7% | 5.52% |
| Cardiff | £260,200 | +1.2% | £1,193 | +2.6% | 5.50% |
| Belfast | £201,500 | +3.9% | £847 | +7.6% | 5.04% |
| Bristol | £341,100 | — | £1,431 | +0.8% | 5.03% |
Source: prices and price growth – Zoopla House Price Index, June 2026 index. Rents and rent growth – Zoopla rental market index, January 2026 snapshot. Gross yield calculated by Visionary Finance as annual rent ÷ average price.
Two caveats on the method. Both datasets come from the same provider so the comparison is consistent, but they are five months apart and measure slightly different things – the price index covers all stock, while the rental index is based on asking rents for new lets, adjusted to reflect achieved rents. Bristol’s annual price growth is not published in the June city summary.
What the table actually shows
Three things stand out.
The spread is narrower than the hotspot articles suggest. Nine of the twelve rows sit between 5.0% and 5.9%. Once you strip out Glasgow and Liverpool, choosing between most major UK cities on yield alone is choosing between differences of a few tenths of a percentage point.
Capital growth and yield are currently pointing the same way. Liverpool, Belfast and Glasgow combine the higher yields with the fastest price growth, while every city in the set growing above 3% a year is in the north of England, Scotland or Northern Ireland. That has not always been true and it will not stay true indefinitely.
Rent growth has turned negative in places. Birmingham and Nottingham both saw average rents fall slightly over the year. Belfast rose 7.6%. A yield figure is a snapshot; the direction of travel underneath it matters more over a ten-year hold.
Averages describe the market, not the operators in it
Before the caveats, one thing worth saying clearly: the figures in that table are averages across all property types and all buyers, including people who bought a flat and let it as it stood. They are not a ceiling.
“Everything in that table is an average, and averages describe the market rather than the operators in it. Plenty of our active investor clients are running portfolios at yields materially above these figures, and doing it consistently. They are not finding secret cities. They are buying below the local average price, adding rooms or changing the use, managing the property properly, and refinancing on improved value to go again. That is a business, with the workload of one. It is a genuinely different activity from buying a flat and letting it, and I would not want anyone reading a 5.5% average and concluding that 5.5% is the ceiling. Equally, I would not want anyone assuming the better returns turn up without the work.”
Hiten Ganatra, Managing Director, Visionary Finance
To be clear about what that involves, because the difference matters. Higher yields generally come from actively managed strategies – houses in multiple occupation, multi-unit blocks, or buying and refurbishing below market value – rather than from standard single lets. They carry higher running costs, additional licensing and regulation, more management time and a narrower pool of lenders. They are gross figures, like every other yield in this article. And they are the outcome of a deliberate strategy rather than a feature of any particular city.
The point is simply that the range is much wider than the averages suggest, in both directions. Where you sit in it depends far more on what you do than on where you buy.
What gross yield does not tell you
Every figure above is gross. It is rent divided by price, and nothing has come out of it yet. On a property yielding 6% gross, a realistic cost stack looks something like this before any tax:
- mortgage interest, by far the largest cost for a leveraged landlord
- letting agent fees, commonly 10% to 15% of rent if you are not self-managing
- maintenance and repairs, with a sensible allowance rather than an optimistic one
- a void allowance – Zoopla put the average time to find a tenant at 20 days in early 2026, the longest since 2020
- landlord insurance, safety certificates, licensing where it applies, and accountancy
A 6% gross yield commonly lands somewhere between 2% and 3.5% net once those are paid, before tax and before any capital growth. That is not an argument against buy-to-let. It is an argument against making the decision on the gross figure.
Our buy-to-let calculator will give you an indication for a specific property.
The rent a lender needs to see, city by city
Here is the part that decides whether a purchase happens at all.
A buy-to-let lender does not lend 75% because you have a 25% deposit. It tests the rent against the mortgage interest at a stressed rate, and lends the lower of the two figures. The Prudential Regulation Authority sets the framework.
The rule: PRA supervisory statement SS13/16. It records 125% as the industry standard minimum interest coverage ratio, and allows lenders to assume all borrowers are higher-rate taxpayers – which is why 145% is common for personal-name applications. On the stress test, lenders must allow for a rate rise of at least 2 percentage points and must assume a minimum borrower interest rate of 5.5%, unless the rate is fixed or capped for five years or more.
So the question is not what a city yields. It is whether the average rent there clears the bar. Applying a 75% loan and a 5.5% stress rate to the same average prices:
| City | Rent needed at 145% ICR | Rent needed at 125% ICR | Actual average rent |
|---|---|---|---|
| Glasgow | £820 | £707 | £1,030 — clears both |
| Liverpool | £852 | £735 | £915 — clears both |
| Sheffield | £898 | £774 | £861 — clears 125% only |
| Belfast | £1,004 | £866 | £847 — clears neither |
| Nottingham | £1,020 | £880 | £992 — clears 125% only |
| Leeds | £1,081 | £932 | £1,024 — clears 125% only |
| Birmingham | £1,082 | £933 | £998 — clears 125% only |
| Manchester | £1,196 | £1,031 | £1,167 — clears 125% only |
| Cardiff | £1,297 | £1,118 | £1,193 — clears 125% only |
| Edinburgh | £1,419 | £1,223 | £1,323 — clears 125% only |
| Bristol | £1,700 | £1,466 | £1,431 — clears neither |
Source: average prices – Zoopla House Price Index, June 2026. Average rents – Zoopla rental market index, January 2026. Rent requirements calculated by Visionary Finance: 75% loan at a 5.5% stress rate, per PRA SS13/16 minimums.
Method. Loan taken as 75% of the average price above, interest calculated at a 5.5% stress rate, then multiplied by the relevant coverage ratio. Worked illustration of the mechanics only – lenders set their own stress rates and coverage ratios, and many now stress five-year fixed products at lower rates.
The good news sits in the middle column. At a 125% coverage ratio – the level lenders commonly apply to limited company applications – nine of the eleven cities clear comfortably. At 145%, the ratio typically used for a higher-rate taxpayer buying personally, only Glasgow and Liverpool do, with Manchester short by around £29 a month and Bristol by nearly £270.
So this is not a wall. It is a structure question with several answers: a company purchase, a five-year fixed rate that sits outside the stress test, a slightly larger deposit, or simply a property that out-performs its local average. Most purchases that look impossible on the averages become straightforward once one of those levers is pulled.
What it does mean is that property selection and mortgage structure matter considerably more than city selection. A yield table tells you where to look. It does not tell you what you can buy.
“People spend weeks choosing a city and about ten minutes choosing how to buy, and it is the wrong way round. The structure decision changes what you can buy far more than the postcode does. The encouraging part is that it is entirely within your control – unlike house prices, or what the Bank of England does next. Get the borrowing arranged properly and a much wider set of properties becomes available to you than the averages suggest.”
Hiten Ganatra, Managing Director, Visionary Finance
Personal name or limited company?
Compare the two middle columns of that table and you can see why so many landlords now buy through a company.
Individual landlords cannot deduct mortgage interest from rental income. Since April 2020 they receive a basic-rate tax credit instead, a change usually referred to as Section 24. Companies are not affected, because interest remains an ordinary business expense.
Lenders reflect that in the coverage ratio, typically applying 125% to a company application against 145% for a higher-rate taxpayer buying personally. On the figures above, that difference alone moves nine of the eleven cities from failing to passing.
It does not follow that a company is right for you. Company products generally carry higher rates and fees, there are running costs, and extracting profit has its own tax consequences. Transferring an existing property into a company is a sale, with stamp duty and capital gains tax to match.
This is a tax question before it is a mortgage question. Take advice from an accountant, and take it before you buy rather than after.
The cash you need, beyond the deposit
On a £250,000 purchase in England at 75% LTV the deposit is £62,500. The purchase costs more than that.
- Stamp duty. Additional properties carry a 5 percentage point surcharge on top of standard rates — £15,000 on £250,000. Scotland and Wales have their own systems at different rates.
- Lender arrangement fee, often a percentage of the loan on specialist buy-to-let products.
- Legal fees, searches and valuation.
- A working reserve for the gap before the first rent, plus any immediate works.
Total cash required is closer to £80,000 than £62,500. Our stamp duty calculator will give you the tax figure for a specific price, and we have covered how LTV and deposits work in more detail separately.
The rules that change the sums
Three things have moved recently enough that older guides get them wrong.
Tenancy law
Section 21 has been abolished and assured shorthold tenancies replaced by assured periodic tenancies in England, from 1 May 2026. Rent can be increased once a year by statutory notice, and bidding wars are banned. A property database for the sector is rolling out from late 2026 and becomes mandatory by the end of 2027.
Energy efficiency
The minimum standard for relevant privately rented homes remains EPC E today. The proposed move to EPC C by 1 October 2030 in England and Wales is government policy but is not yet law — the secondary legislation is expected in 2027. A cost cap of up to £10,000 per property is proposed, and the government’s own impact assessment puts average spend at around £5,400.
The practical point for a buyer today: a property rated D or below may need work within the hold period, and that cost belongs in your purchase calculation, not in a vague future column.
Tax administration
Making Tax Digital for Income Tax applies to landlords with gross property income above £50,000 from April 2026, dropping to £30,000 from April 2027. Quarterly submissions, not annual.
Think about the exit before you buy
Selling an investment property is a disposal for capital gains tax. For individuals, residential property gains are taxed at 18% for basic-rate taxpayers and 24% for higher-rate, against an annual exempt amount of £3,000. It must be reported and paid within 60 days of completion.
That last detail catches people out regularly. Sixty days is not long if the money is committed elsewhere.
The exit also shapes the structure question. A property held personally and a property held in a company are sold on entirely different tax footings, and the right answer depends on a timescale you have to think about now.
Is buy-to-let still worth it in 2026?
On the numbers, the sector is in better shape than the headlines usually suggest — though its own data says two things at once, and both are true.
Landlord businesses are performing well. Paragon’s second-quarter 2026 research found 86% of landlords making a profit from lettings, up two points on the previous quarter, with tenant arrears at a record low. UK Finance reported buy-to-let interest coverage across the market at 221% in the first quarter of 2026, up from 204% a year earlier.
And landlords are still leaving. NRLA research from March and April 2026 found three times as many of its members had sold a property in the past year as had bought one — 21% against 7%. Its confidence index rose five points and still sits at the second-lowest reading since the series began in 2019.
A sector where profitability is up and participation is down is not responding to returns. It is responding to expected risk: regulation, tax and administration rather than the numbers on the page. Those figures come from members’ panels and are opinion data, so they describe sentiment rather than the whole market.
For anyone still buying, that is not an unhelpful backdrop. Less competition for stock, arrears at a record low and rental cover across the market at its strongest in years is a reasonable set of conditions to be buying into — provided the purchase is underwritten properly rather than optimistically.
“The landlords doing well right now are the ones treating it as a business rather than a side effect of owning a property. They know their net yield rather than their gross, they have modelled what happens if rates move two points, and they have decided in advance what would make them sell. That is a learnable set of habits, not a talent. The numbers still work in 2026 — they just do not work by accident.”
Hiten Ganatra, Managing Director, Visionary Finance
Speak to an award-winning buy-to-let mortgage adviser
Visionary Finance was voted Best Buy-to-Let Broker at the what MORTGAGE Awards 2026 – an award decided by customer votes rather than by an industry panel.
Before you make an offer, it is worth knowing what the property will actually support and through which lender. We can run that with you, including the personal name against company comparison, and we work with first-time landlords and portfolio landlords alike. We have also set out the rates, terms and fees side of buy-to-let mortgages separately.
Speak to Visionary Finance about your buy-to-let mortgage on +44 (0) 1908 465 100.
Common Questions
What is a good rental yield in 2026?
Across the eleven cities above, average gross yields cluster between 5.0% and 5.9%, with Glasgow at 7.5% and Liverpool at 6.4% as the outliers. Those are market averages across all property types – actively managed strategies such as HMOs and multi-unit blocks can achieve considerably more, with correspondingly more work, cost and regulation. A 6% gross yield commonly becomes 2% to 3.5% net once costs are paid, so judge any property on the net figure.
Which UK city has the best buy-to-let yields?
On average prices and rents for June 2026 and January 2026 respectively, Glasgow leads at around 7.5%, followed by Liverpool at 6.4%. Both also recorded above-average price growth, though a high yield usually reflects lower capital values rather than stronger rents.
How much deposit do I need to invest in buy-to-let?
At least 25% for most products. On a £250,000 purchase in England, budget closer to £80,000 in total once the 5% stamp duty surcharge, legal costs, lender fees and a working reserve are included.
Why will a lender not lend me 75% even with a 25% deposit?
Because the rent must also cover the mortgage interest at a stressed rate. On average figures, the average property in most major UK cities does not clear a 145% coverage ratio at 75% loan to value, so the loan is capped by the rent rather than the deposit.
Is it better to buy buy-to-let through a limited company?
It depends on your tax position. Companies are not affected by the Section 24 restriction on mortgage interest relief, and lenders often apply a 125% coverage ratio rather than 145%, which can allow more borrowing. Against that, rates, fees and running costs are usually higher. Take accountancy advice before deciding.
This article is general information about property investment and how buy-to-let lending works. It is not advice, and it is not tax advice. Take advice from an accountant or solicitor on the tax and legal aspects of a purchase.
Past performance and current market averages are not a guide to future returns. The value of property can fall as well as rise, and rental income is not guaranteed.
All figures are averages drawn from the named sources at the dates stated, and were correct at the date of publication. Yield and rent-requirement figures are calculated by Visionary Finance from those sources and are illustrations of the arithmetic, not quotations.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Visionary Finance Ltd is authorised and regulated by the Financial Conduct Authority. The FCA does not regulate certain types of mortgage, including some buy-to-let, international, bridging and commercial mortgages.
