Hello Neighbour used average rents, house values and gross rental yields from property portal Zoopla’s September 2025 index and assumed the landlord was a basic-rate taxpayer.
The analysis revealed how much the sector has been squeezed by tax increases from successive governments and spiralling costs.
It comes four months after Labour introduced the Renters’ Rights Act to heavily regulate the buy-to-let sector. The reforms mean landlords can now raise rents only once a year, and bidding wars between tenants are banned.
Landlord returns will be diminished further from April, when property income tax rises by two percentage points, which will put more pressure on rental costs.
“Prospective landlords may want to think twice before assuming property is automatically the best home for their money. Becoming a landlord is not a passive investment; there are tenants to deal with, repairs to pay for and the risk of unexpected costs,” said Caitlyn Eastell, of comparison site Moneyfactscompare.
She explained that with a return of 1.48pc, someone putting £50,000 in would earn £740 a year, “compared with the top one-year cash Isa which could give them around £2,370 in interest”.
The best accounts currently offer 4.60pc for easy access and nearly 5pc on fixed-term Isa accounts, according to Moneyfactscompare.
