Gross rental yield = (Annual rental income / Property value) × 100. Net yield deducts all costs — mortgage interest, management fees, maintenance, voids, and insurance. A realistic net yield for a UK property is typically 3–7% depending on location, mortgage level, and property condition. Always use net yield, not gross, for investment decisions. Yields in London are often 2–4% gross while Northern cities may achieve 6–8% gross.

A "good" yield depends on your investment goals. As a minimum, aim for a net yield that exceeds your mortgage rate after all costs. A positive cash flow means rental income exceeds all costs including mortgage payments. Historically, UK residential yields of 5–8% net have been considered viable for investment. However, capital growth prospects and mortgage leverage can make lower-yielding properties profitable overall.

Yes. Buy-to-let mortgages have different criteria from residential mortgages. Lenders assess rental income against the mortgage payments (typically requiring rent to be 125–145% of the mortgage payment at a stressed interest rate). They also consider your personal income. Most lenders require a minimum 15% deposit (85% LTV maximum). Interest rates on buy-to-let mortgages are typically higher than residential rates. Some lenders only lend on properties in certain postcodes.

Beyond the purchase price and mortgage, budget for: Stamp Duty (3% surcharge for second homes), solicitor fees (£500–£1,500), surveys (£300–£600), lender valuation, SDLT (from April 2021, 3% surcharge on top of standard rates), insurance (£200–£500/year), agent fees (8–12% of rent), maintenance (£500–£1,500/year for average property), void periods (budget for 1–2 months without rental income), and letting agent renewal fees.

Void periods are times when your property has no tenant. During void periods, you pay all costs with no income. Budget conservatively — even in popular rental areas, voids of 2–4 weeks between tenancies are normal. Longer voids can occur due to tenant arrears, property condition issues, or market conditions. Always maintain a cash reserve of at least 6 months of mortgage payments to cover void periods.

From April 2018, landlords cannot let or continue to let properties with an EPC rating below E. By 2030, all rented properties must reach EPC C or above (subject to the £10,000 cost cap per property). Properties with poor EPC ratings may need substantial upgrades before they can be legally let. This is a significant investment risk for older properties.