Which UK Cities Have the Highest Rental Yields?
Written by: Marcus M. Araz, MBA, PhD · Updated:
For an average flat, the major cities with the highest gross rental yields are Newcastle (9.3%), Sunderland (8.9%), Hull (8.6%), Stevenage (8.2%), Nottingham and Milton Keynes (8.1%). In London the yield ranges from 3.8% to 7.7% depending on the borough. But in some of the highest-yielding cities flat prices have barely moved in five years. For investors who want both strong rents and capital growth, Newcastle, Wolverhampton, Liverpool, Manchester, Salford and Leeds stand out: gross yields there are between 7% and 9.3%, and flat prices rose by 9% to 17% over five years. The figures are calculated from Office for National Statistics (ONS) flat price data for July 2026 and flat rent data for August 2026.
Gross rental yield by city
The table divides the annual average flat rent in each city by the average flat price. It is sorted from highest to lowest yield.
| City | Average flat price | Average flat rent (monthly) | Gross yield | Flat price, 5 years | In our portfolio |
|---|---|---|---|---|---|
| Newcastle | £128,296 | £993 | 9.3% | up 12.7% | |
| Sunderland | £81,768 | £608 | 8.9% | up 6.5% | |
| Hull | £78,654 | £563 | 8.6% | up 2.8% | |
| Stevenage | £171,538 | £1,168 | 8.2% | down 3.2% | Nexus, £240,000 |
| Nottingham | £123,746 | £837 | 8.1% | up 2.9% | |
| Milton Keynes | £167,700 | £1,138 | 8.1% | up 5.0% | Eastbrook Village, £260,000 |
| Coventry | £129,664 | £853 | 7.9% | up 4.2% | |
| Southampton | £152,827 | £1,000 | 7.9% | up 1.6% | |
| Derby | £107,116 | £709 | 7.9% | up 4.1% | |
| Salford | £157,361 | £1,020 | 7.8% | up 9.6% | |
| Stoke-on-Trent | £89,184 | £576 | 7.8% | up 6.7% | |
| Wolverhampton | £115,198 | £737 | 7.7% | up 16.7% | |
| Birmingham | £144,814 | £919 | 7.6% | up 2.4% | |
| Bristol | £241,393 | £1,508 | 7.5% | up 5.3% | |
| Portsmouth | £166,320 | £1,045 | 7.5% | up 1.9% | |
| Norwich | £141,187 | £881 | 7.5% | down 3.0% | St James Quay, £199,950 |
| Cardiff | £160,574 | £995 | 7.4% | up 5.8% | |
| Liverpool | £129,558 | £786 | 7.3% | up 13.6% | SoapWorks, £179,950 |
| Luton | £159,594 | £976 | 7.3% | up 0.9% | Lu2on, £210,000 |
| Leeds | £151,734 | £905 | 7.2% | up 9.2% | |
| Plymouth | £133,502 | £799 | 7.2% | up 12.1% | |
| Manchester | £195,305 | £1,147 | 7.0% | up 12.1% | 3 projects, from £120,000 |
| Sheffield | £133,576 | £774 | 7.0% | up 11.0% | |
| Bradford | £108,466 | £621 | 6.9% | up 11.2% | |
| Leicester | £140,724 | £799 | 6.8% | up 2.5% | |
| Reading | £223,165 | £1,272 | 6.8% | up 3.2% | 2 projects, from £400,000 |
| York | £179,808 | £1,010 | 6.7% | up 0.9% | |
| Bournemouth | £196,471 | £1,076 | 6.6% | down 3.3% | |
| Oxford | £286,895 | £1,557 | 6.5% | down 5.9% | Canalside Quarter, £409,950 |
| Cambridge | £298,575 | £1,455 | 5.8% | down 3.4% | 4 projects, from £349,950 |
| Brighton | £295,683 | £1,381 | 5.6% | down 0.6% |
Gross rental yield by London borough
In London yields rise as you move away from the centre: prices fall markedly, rents much less so. Flat prices in the central boroughs have fallen over five years, which has pushed up the yield on a flat bought for the same money. For more, see our Is buying in London a good idea page.
| Borough | Average flat price | Average flat rent (monthly) | Gross yield | Flat price, 5 years |
|---|---|---|---|---|
| Barking and Dagenham | £251,856 | £1,614 | 7.7% | up 10.5% |
| Newham | £325,381 | £1,836 | 6.8% | down 8.7% |
| Bexley | £244,998 | £1,387 | 6.8% | up 2.7% |
| Enfield | £298,486 | £1,656 | 6.7% | down 2.1% |
| Tower Hamlets | £430,120 | £2,284 | 6.4% | down 18.9% |
| Greenwich | £351,675 | £1,831 | 6.2% | up 0.3% |
| Hounslow | £352,823 | £1,800 | 6.1% | up 5.5% |
| Harrow | £317,917 | £1,615 | 6.1% | down 2.5% |
| Hillingdon | £285,116 | £1,445 | 6.1% | down 0.6% |
| Lambeth | £439,289 | £2,186 | 6.0% | down 7.0% |
| Brent | £378,992 | £1,801 | 5.7% | down 3.2% |
| Merton | £405,123 | £1,931 | 5.7% | up 1.5% |
| Southwark | £469,796 | £2,178 | 5.6% | up 3.0% |
| Barnet | £372,014 | £1,738 | 5.6% | down 4.2% |
| Ealing | £407,789 | £1,863 | 5.5% | up 3.0% |
| Hackney | £524,885 | £2,360 | 5.4% | down 3.1% |
| Wandsworth | £526,813 | £2,335 | 5.3% | down 2.3% |
| Lewisham | £376,322 | £1,657 | 5.3% | up 3.9% |
| Kingston | £364,805 | £1,604 | 5.3% | up 3.9% |
| Islington | £560,124 | £2,483 | 5.3% | flat |
| Hammersmith and Fulham | £568,235 | £2,347 | 5.0% | down 13.5% |
| Haringey | £473,036 | £1,917 | 4.9% | up 4.7% |
| Westminster | £775,956 | £2,957 | 4.6% | down 19.2% |
| Camden | £671,443 | £2,407 | 4.3% | down 7.3% |
| Kensington and Chelsea | £971,688 | £3,069 | 3.8% | down 16.4% |
Yield or capital growth?
The key message of the table is that the highest rental yield is not always the best investment. In cities such as Hull, Nottingham, Luton and Stevenage the gross yield is high, but flat prices have either barely risen or fallen over five years, so almost all of the return comes from rent. In Newcastle, Liverpool, Manchester and Wolverhampton, by contrast, yields of 7% and above came with 12% to 17% capital growth over five years.
- If cash flow is the priority: low-priced cities with strong rents (Newcastle, Sunderland, Hull, Nottingham).
- Yield and capital growth together: large cities that are business and university hubs (Manchester, Liverpool, Leeds, Newcastle).
- Long-term value and liquidity: London, Cambridge and Oxford. Yields are lower, but the pool of buyers and tenants is far deeper.
From gross to net: what you actually keep
Gross yield is the figure before costs. An example for the average flat in Manchester (assumptions: management fee of 12% of rent, annual service charge of £1,800, one month’s void a year, insurance and maintenance of £500):
| Item | Annual |
|---|---|
| Rental income | £13,764 |
| Management fee (12%) | £1,652 |
| Service charge | £1,800 |
| One month void | £1,147 |
| Insurance and maintenance | £500 |
| Net rent, before tax | £8,665 |
| Net yield | 4.4% |
So a 7% gross yield falls to about 4.4% after costs. Tax on rental income is then calculated on this; for your own situation, use our our rental income tax calculator . While the flat is let, council tax is paid by the tenant; more on our Council tax in England page.
Why yields are lower on new builds
ONS data is the average of the whole flat stock in a city, most of which is second-hand. Because new builds cost more per square metre, their gross yield is usually 1 to 2 points lower than in this table. On the other hand, a 10 year warranty, low maintenance costs and energy efficiency make new builds easier to let. When assessing a new project, calculate the yield from current rental listings in the same area, not from the developer’s brochure.
Frequently asked questions
Which UK city has the highest rental yield? According to 2026 ONS data, the major city with the highest gross yield on an average flat is Newcastle at 9.3%, followed by Sunderland (8.9%) and Hull (8.6%).
What is the rental yield in London? For an average flat it ranges from 3.8% (Kensington and Chelsea) to 7.7% (Barking and Dagenham) depending on the borough. Yields in outer boroughs are markedly higher than in the centre.
What is the rental yield in Manchester? 7.0% gross on an average flat; 7.8% in Salford. After management, service charge and voids, the net yield falls to between 4% and 5%.
What is a good rental yield? In the UK a gross yield of 5% to 7% on a new build is considered good. Higher rates are usually found in low-priced areas with weak capital growth, so weigh yield together with growth.
What is the difference between gross and net rental yield? Gross yield is annual rent divided by price. Net yield deducts the management fee, service charge, voids, insurance and maintenance; the gap is usually 2 to 3 points.
Does it make sense to buy in a high-yield city? Yes, if cash flow is your priority. But in a city where prices have not risen for five years, your gain on sale may be limited; also look at cities that offer yield and growth together.
Related pages
Is buying in Manchester a good idea, Is it worth buying in Liverpool, Will UK house prices fall and UK rental income tax.
Sources
Flat prices are from the ONS House Price Index (July 2026, provisional) and flat rents from the ONS Price Index of Private Rents (August 2026); local figures come from the ONS local housing prices tool. Edinburgh and Glasgow are not in the table because the ONS local tool does not publish flat rents for Scotland. Gross yields are our own calculation; the net yield example is based on assumptions.
Legal notice
capital.works® (YATIRIM UK LIMITED) is a real estate advisory company; it does not provide legal or tax advice. The title and contract process is carried out by a solicitor registered in the UK. On the mortgage side, our FCA authorisation applies (FRN 1049015, authorised credit broker).
The next step
Tell us your budget and priority (cash flow or capital growth), and we will send projects in suitable cities side by side with their net yields after service charges and costs: Contact us.