Newcastle tops rental yield rankings as landlords face higher property income tax – The Intermediary
Newcastle upon Tyne offers the highest estimated gross rental yield in England and Wales at 6.9%, according to research from Rushbrook, while Derbyshire Dales records the lowest at 2.9%. The findings come as landlords face a 2 percentage point increase in property income tax rates following the Autumn Budget.
Newcastle upon Tyne has been identified as the highest-yielding rental market in England and Wales, with an estimated gross rental yield of 6.9%, according to research from residential property management specialist Rushbrook.
The findings highlight significant differences in rental returns across the country as landlords prepare for a 2 percentage point increase in property income tax rates announced in the Autumn Budget.
Rushbrook analysed UK House Price Index figures and Office for National Statistics private rental data for August 2026, comparing average property prices with monthly rents to calculate estimated gross rental yields across local authorities.
Across England, the average property price stood at £293,525, with monthly rents averaging £1,459, producing an estimated gross rental yield of 6%. The equivalent figure for Wales was 4.7%.
Newcastle recorded the highest estimated yield at 6.9%, followed by Portsmouth at 6.7% and Tower Hamlets in London at 6.6%.
Nottingham, Manchester, Southampton and Bristol each recorded yields of 6.4%, while Salford followed at 6.3%. Blackpool and Lincoln completed the ten highest-yielding locations, both at 6.2%.
At the opposite end of the market, Derbyshire Dales recorded the lowest estimated gross rental yield at 2.9%, less than half the average for England.
Elmbridge and Waverley in Surrey, alongside Powys in Wales, each recorded yields of 3.1%, while Malvern Hills followed at 3.2%.
Uttlesford and Forest of Dean both recorded yields of 3.3%, with East Devon, South Hams and Mole Valley completing the ten lowest-yielding areas at 3.4%.
Rushbrook said landlords operating in lower-yielding areas could face greater difficulty absorbing additional tax liabilities and rising operating costs, particularly where mortgage repayments and maintenance expenses already account for a significant proportion of rental income.
However, the company cautioned that higher gross yields do not necessarily translate into stronger profitability, as the figures do not account for financing costs, taxation, maintenance or other expenses.
Roma Sharma, managing director of Rushbrook, commented: “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.
“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.”
