What is Net yield?
Last verified 31 October 2026
Net yield is your annual rent minus the yearly running costs of a property, shown as a percentage of the property's value or purchase price. It is lower than gross yield, which ignores costs.
Why it matters to landlords
Which costs to include is up to you, but being consistent matters when comparing properties. A practical list follows HMRC's allowable expenses: repairs and maintenance, insurance, utilities, letting and management fees, accountant's fees and business mileage. Capital improvements are not deductible, so they belong in the purchase price or value instead.
Mortgage costs need care. For residential lets, HMRC says relief on finance costs is limited to the basic rate rather than being deducted from rent, so mortgage interest and tax are different questions from the yield on the property itself. A net yield before finance costs compares the asset, whereas one after interest compares your financing. State which you mean when you quote it.
Example
Jo buys a flat for £150,000 and lets it for £9,600 a year. Running costs are repairs £600, insurance £350, agent fees £960 and utilities £290, totalling £2,200. Net rent is £7,400, so the net yield is 4.9% of £150,000, against a gross yield of 6.4%.