Landlords face a 2 percentage point rise in property income tax rates following the Autumn Budget, and new research from residential property management firm Rushbrook has mapped rental yields across England and Wales to show where returns are strongest and weakest.
Rushbrook compared average house prices and monthly rents from the UK House Price Index and Office for National Statistics private rental data for August 2026, using them to estimate gross rental yields for each local authority.
The average house price in England is £293,525, against average monthly rents of £1,459, which gives an estimated gross yield of 6.0%. Wales averages 4.7%.
Lowest rental yields
Derbyshire Dales records the lowest estimated gross yield in England and Wales at 2.9%, less than half the English average. Elmbridge and Waverley in Surrey follow at 3.1%, level with Powys in Wales, while Malvern Hills ranks fifth at 3.2%.
Uttlesford and Forest of Dean both post 3.3%. East Devon, South Hams and Mole Valley complete the ten lowest at 3.4%.
Rushbrook’s analysis suggests landlords in these areas have less rental income relative to property values from which to absorb higher tax and rising operating costs, particularly where mortgage payments and maintenance are already squeezing profitability.
Highest rental yields
Newcastle upon Tyne tops the table at 6.9%, more than double the Derbyshire Dales figure. Portsmouth follows at 6.7%, with Tower Hamlets in London third at 6.6%.
Nottingham, Manchester, Southampton and Bristol each record 6.4%, while Salford sits on 6.3%. Blackpool and Lincoln complete the top ten at 6.2%.
Higher gross yields do not guarantee greater profitability, but they point to a stronger income return relative to property values, which could give landlords more scope to manage rising costs without passing them straight on to tenants.
“The Government’s decision to increase property income tax rates adds another layer of financial pressure for landlords, but the impact will vary considerably depending on where they own property and the returns they are already achieving,” said Roma Sharma, managing director of Rushbrook.
“Those operating in lower-yielding areas may find themselves with very little room to absorb further costs once mortgage payments, maintenance and other expenses are accounted for. While stronger yields provide a better starting point, they certainly don’t make landlords immune to the additional tax burden.
“With profitability coming under increasing pressure, effective property management is more important than ever. Minimising void periods, managing maintenance proactively and keeping unnecessary expenditure under control can make a meaningful difference to the long-term viability of a rental investment.”
