Gross Yield

Gross yield is the simplest measure of a property's return relative to its price. It is calculated by dividing the annual rental income by the purchase price and expressing the result as a percentage.

Gross yield makes no deductions for running costs: no mortgage interest, no maintenance, no management fees, no voids. It is a before-costs figure.

Despite its limitations, gross yield is useful as an initial filter. A property with a gross yield below 6% in the current mortgage rate environment will be very difficult to make cashflow-positive after all costs. A property with 8%+ gross yield has meaningful room to absorb costs and still generate income.

Regional gross yield patterns in the UK: Northern England and Yorkshire consistently produce higher gross yields (7-10% in many postcodes) than the Midlands (5-8%) or London (3-5%). The inverse relationship between capital values and yields is a fundamental characteristic of the UK property market.

Proppys shows gross yield estimates on each listing, calculated from the guide or asking price and an estimated rent based on PropertyData data for the postcode.