How Much Rent Should I Charge as a Landlord?
2 min read · Reviewed 14 August 2026
Setting the right rent is one of the most important decisions a landlord makes. Price too high and the property sits empty; too low and you leave money on the table. Here is how to find the right figure.
Start with rental yield
The most common starting point for setting rent is rental yield, which expresses annual rent as a percentage of the property value. If a £250,000 property is let for £12,500 a year, that is a 5% gross yield. Most UK landlords aim for a gross yield somewhere between 4% and 7%, though this varies enormously by region.
Yields tend to be higher in northern cities, where property is cheaper relative to rents, and lower in London and the South East, where high property values pull yields down. Working backwards from a target yield gives you a sensible first figure to test against the market.
Let the local market be the final word
Yield gives you a target, but tenants pay the going local rate, not a formula. The single best way to price a rental is to look at what comparable properties nearby are actually being advertised and let for. Check the major letting portals, and speak to a couple of local agents who know real achieved rents, not just asking prices.
Compare like with like: the same number of bedrooms, similar condition, similar location and transport links, and whether furnished or unfurnished. A property in excellent condition or in a sought-after area can command a premium; one that needs work should be priced accordingly.
Make sure the rent covers your costs
Gross yield ignores your outgoings. To know whether a rent actually works, look at net yield: the profit left after mortgage interest, landlord insurance, maintenance, letting or management fees, safety certificates, and an allowance for void periods when the property sits empty between tenants.
A rent that looks healthy on paper can leave little profit once these are subtracted, especially with a mortgage. Build a realistic monthly cost estimate and check the rent comfortably covers it with a margin for unexpected repairs.
Don't forget tax on rental income
Rental profit is taxable. You report it through Self Assessment and pay Income Tax at your usual rate on the profit after allowable expenses. Since 2020, mortgage interest is no longer deducted from profit; instead you get a tax credit worth 20% of the interest, which affects higher-rate taxpayers most.
Factor tax into your expectations of what the property will really earn you. Many landlords hold buy-to-let properties in different ownership structures for tax reasons, so it is worth taking advice if you own several.
Pricing to avoid void periods
An empty property earns nothing, so an over-ambitious rent can cost more in voids than it gains in a higher monthly figure. It is often better to price competitively, secure a reliable tenant quickly, and keep them long term than to chase the top of the market and face repeated gaps.
Our rent-to-charge calculator turns a property value and target yield into a suggested monthly rent and a 4% to 7% range, and can show your net profit once you add your costs. Use it as a starting point, then refine against the local market.
This guide is general information, not financial, tax or legal advice. Figures are estimates and can change. Always check GOV.UK or a qualified professional for your own situation.