Best Rental Yields in the UK 2022

Discover the highest rental yields in the UK per region, how to find the best rental yield and how to calculate yield on a rental property using our rental yield calculator.

What is a Rental Yield?

One of the most important metrics for an investor to consider is the rental yield they’ll receive. This is the returns you make on a property investment when the monthly rent is measured against the overall value of the property. Understanding the average rental yields in the UK for 2022 is vital for making an informed decision going forward.

Remember that the main two sources of income in a Buy-to-Let investment are the rental yield and the capital growth. These are very different terms that describe the two income streams a property can deliver.

Rental yield is based on you letting your property out to a tenant and what you can expect to earn, typically over a year.

Capital growth is your profit on a property purchase and is based on the natural rises that you may experience as property prices go up.

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What is a Good Rental Yield in the UK?

Rental yields can be impacted by a wide variety of different things and as such, no one yield is the same. As a whole, the average UK rental yield sits at 3.63%, so anything over that amount can be considered a high rental yield area. Rental yields can change from postcode to postcode, meaning it’s important to keep researching investment locations so you can keep up with what is a good rental yield in the UK. 

At SevenCapital, we typically look for locations that can offer long-term growth and high levels of tenant demand. This means identifying quality locations that are still relatively affordable. While rents in London are high, for example, so are property prices. This means in terms of rental yields, the capital is below average.

Instead, a savvy investor will look for relatively affordable properties in locations where demand is set to grow over time. These are considered ‘emerging locations’ and generally will command higher rents over time, building on affordable property values and developing as a high rental yield area.

Consider Birmingham, for example. Certain postcodes in the city centre are hitting 6% because while property is still less expensive in the second city, the amenities and opportunities available are attracting residents willing to spend more. Rental prices in the city are increasing and with it, the property rental yield investors can expect.

Source: Zoopla / Statista

Best Rental Yields in the UK 2021

After the unprecedented highs and lows of 2021, it’s expected that 2022 will be a transformative year for UK property. Demand has reached new levels and records are being broken seemingly every day. 

There’s plenty of opportunity for investors to jump back into the market, especially when many have been holding off on making a purchase. Unsurprisingly, our research has highlighted both fresh contenders and established locations in our list of the UK’s best rental yields.

With this in mind, here are the average rental yields in the UK for 2021 and what we can expect to see going forward.


Region Average Price Average Rent Average Rent (p.a) Rental Yield
London £648,942 £1,583 £18,996 2.90%
South East £424,800 £1,095 £13,140 3.10%
South West £328,051 £943 £11,316 3.44%
West Midlands £247,956 £755 £9,060 3.60%
East Midlands £239,222 £704 £8,448 3.80%
East £372,369 £1,001 £12,012 3.22%
North East £200,737 £560 £6,720 3.34%
North-West £214,767 £790 £9,480 4.41%
Yorkshire & the Humber £193,067 £697 £8,364 4.33%
Wales £209,840 £698 £8,376 3.99%
Scotland £206,359 £687 £8,484 4.11%


As you can see, when we compare regional performance, there’s some stand-out results. London continues to offer below-average yields, mostly in part due to its incredibly high property prices when compared with the wider country. 

Similarly, the North-West offers the best rental yield in the UK, driven by exceptional regeneration projects and the London ‘exodus’ to the north where prices are less expensive. With this above-average performance reflected in their predicted capital growth in our 2022 UK Market Forecast, , it’s no surprise their yield performance is market leading.

It’s important to remember however, that these are regional performances. Don’t be afraid to dig a little deeper into key locations, after all, cities such as Birmingham, Nottingham and Leeds are offering some of the best rental yields in the UK despite their wider region’s apparent underperformance.

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Expected Rental Growth in 2021

So we know the best rental yields UK for 2021 but what about the rental growth and UK rental yields in 2022? Which locations are expecting to see the biggest rental increases and cement themselves as the high rental yield areas in the UK?  

Rental prices are much more resilient than property prices, even in the face of crisis. During 2009 and the global financial crash, rents dropped by just 2% compared to house prices falling by 18%. Despite the challenges we’ve faced this year, price growth and rental prices have shown their resilience, boosted by demand.

According to Savills, rental prices will rise by double figures by the end of 2025, with the largest rises occurring both this year and in 2022 as the market recovers.

While it’s true economic issues can stall rental payments and thus, yields, it’s common knowledge that demand can drive rental prices and there’s no shortage of demand at present. 

Savills also highlight that, while yields may fluctuate over the short-term, the market will readjust and there could be appealing opportunities for those willing to hold over the long-term.

Net vs Gross Rental Yields

A common question asked is: what is the difference between net and gross rental yields? Simply put:

Gross yield is everything before expenses.
Net yield is everything after expenses.

Both gross and net rental yields can be worked out in similar ways.

Gross Yield = (weekly rental price x 52) / property value x 100
Net Yield = (weekly rental price x 52) – costs / property value x 100


What Costs Are Involved in Property Investment?

When you’re working out your net yields, it’s vital to understand potential costs. These will vary depending on your investment style (are you more hands-off, or hands-on?) but ultimately, there are several mandatory costs you should take into account that will impact your net rental yield.

The main one to consider is your mortgage interest rate. Unless you’re a cash buyer, this will be your biggest expenditure and will typically be covered by your rental income – at least initially. 

Maintenance and service charges or ‘ground rent’ are the other compulsory payments and must be factored into your finances from the beginning. 

Then, depending on your investment style, you’ll need to consider letting fees, agent fees, insurance and other admin costs. 

If you’re a hands-on investor you may consider performing the letting and tenant handling yourself, which will save in the long-run. 

For many, this isn’t an option. If you’re investing from overseas for example, it can prove incredibly difficult to provide the necessary communication on a daily basis. This is where having experienced partners can help.

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