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The highest yielding areas for buy-to-let property in the UK

Thinking of buying a rental property? One strategy for investment is to focus on higher yielding markets. Here are the top investor hotspots in the UK.

Words by: Ellie Isaac

Senior Editor

Ready to become a landlord and want the biggest return on your investment? 

It’s worth getting to grips with rental yield if you’re purchasing a buy-to-let property.

Gross rental yield is the amount of money you make from a rental property each year, after you take away the cost of buying it. Net rental yield also factors in the cost of maintaining the rental property.

Both are usually expressed as a percentage and can help you decide if a property is a good investment.

But it’s not just yield that you need to think about with a buy-to-let property. A high-yielding market might not deliver much house price growth or tenant demand, which can be a key consideration as to whether you’ll get a return down the line.

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The highest-yielding rental regions in the UK

Our Rental Market Report for September 2023 shows that the average rental yield in the UK is currently 5.03%, as the average buy-to-let property costs £263,000 and the average rental rate is £1,163.

Yields are running higher than this time last year, when the average gross yield was 4.8%. The average investment property cost the same but average rents were lower at £1,053.

The region with the highest rental yields is currently the North East, where the average gross yield is 7.2%.

Locations with cheaper house prices tend to offer the greatest yields, even though rent is also usually cheaper.

The average buy-to-let property costs only £109,000 in the North East, so an average rent of £649 offers a greater return in comparison to the cost of the property.

The North East’s yield appeal is largely thanks to the investment triangle of Sunderland, Middlesbrough and Hartlepool, where gross yields sit between 8.01% and 8.39%.

On the other hand, London has the lowest gross yield in the UK as it’s so expensive to buy a rental property there - despite average rents reaching £2,053 this month. However, this is higher than the average gross yield in London this time last year of 4.16%.

RegionAverage gross yieldAverage monthly rentAverage price of a buy-to-let property
North East7.2%£649£109,000
North West6.3%£795£151,000
Northern Ireland6.2%£744£143,500
Yorkshire and the Humber6.1%£758£150,000
West Midlands5.6%£852£182,500
East Midlands5.5%£816£178,000
South West5.0%£1,016£242,500
East of England5.0%£1,111£266,500
South East5.0%£1,254£301,000
Zoopla Rental Market Report for September 2023 (data to July 2023)

The 10 highest yielding rental cities in the UK

When it comes to cities, you’re generally better off focusing your search in the North of England if you’re after a high yield.

In Sunderland, the average rental property costs a little over £80,000, meaning a high 8.39% gross yield with a £582 rental rate.

Burnley, Liverpool and Blackburn are top investor cities in the North East while Dundee and Glasgow are buy-to-let hotspots in Scotland.

Discover more about living in Dundee

CityAverage gross yieldAverage monthly rentAverage price of a buy-to-let property
Zoopla Rental Market Report, September 2023 (data to July 2023)

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The highest yielding areas in each region of the UK

Looking for a buy-to-let property near where you live? It can be useful as you know the local area and can work closely with a local letting agent.

So you might want to consider which parts of your region offer the greatest rental yield. Here are the top 3 local authorities for yields in each UK region.

East Midlands

East of England


North East

North West


South East

South West


West Midlands

Yorkshire and the Humber

What is rental yield?

Rental yield is the amount of money you make from a rental property each year against the cost of purchasing and running it. It’s always expressed as a percentage.

The gross yield only takes the cost of the property and the rental income into account.

The net rental yield, on the other hand, considers the extra costs of running the property, like maintenance and property management.

To figure out the best investment property for you, it’s worth looking at both of these yields as well as other factors.

Why is rental yield important?

Before you jump into buying a property to rent out, you've got to figure out if it’s a worthwhile venture.

If your rental income doesn't cover your costs, or you're just breaking even, unexpected expenses like fixing a broken boiler or a leaky roof can impact your finances.

So looking at the potential rental yield will help you do the maths and make sure it’s a good investment.

What else to think about with a buy-to-let property

There’s more to choosing a good buy-to-let property than just the rental yield.

You could buy a property with a strong yield, but if house prices aren’t rising or you can’t find tenants, it might not be the best investment.

House price trends

Get a feel for house price growth to see if the property is likely to rise in value. Look at historic sale prices for individual properties as well as value increases for the postcode and local area.

Search house prices

The cost of a buy-to-let mortgage

At the same time, you need to think about the costs of taking out a buy-to-let mortgage and all the other associated costs of running a rental property.

Buy-to-let mortgages rates in September 2023

Tenant demand

It also helps to understand what tenant demand is like in the area and what sort of properties they’re looking for. 

Speak to a letting agent to find out what’s happening in the local rental market. They’ll be able to share what tenants are looking for and which properties could be a strong buy-to-let investment.

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How to work out your gross rental yield

Let’s say you want to buy a property worth £200,000. You plan to charge £1,000 per month in rent, which works out to £12,000 per year. Divide 12,000 by 200,000, then multiply by 100. That equals a gross yield of 6%.

(Annual rent / property value) x 100 = gross rental yield

How to work out your net rental yield

To work out your net rental yield, you need to take your extra costs off your annual rental income.

So add up the amount of money you think you’ll spend over the year. This will include paying the mortgage, agency fees, property maintenance, and any costs you might incur to keep up with regulations.

Then deduct these costs from your annual rental income, and do the same sum from there.

[(Annual rent - annual costs) / property value] x 100 = net rental yield

Let’s say you’re buying the same £200,000 property and charging the same £12,000 per year in rent. 

But you’re spending £300 on maintenance and agency fees, which comes to £3,600 over the year.

That means your net rental yield for this property is 4.2%.

We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zoopla Property Group accepts no responsibility or liability for any decisions you make based on the information provided.