Middlesbrough's TS1 district returns the highest gross yield in Propalt's October 2026 sample: 10.5% on a two or three bed terraced house. A median asking rent of £697.50 a month sits against a median price of £79,950 for terraced homes that went sold subject to contract in Q3 2026.
At the other end, Walthamstow (E17) returns 3.8%. Rent there is more than three times TS1's. The price is more than nine times higher.
This ranking covers 15 postcode districts we could measure with enough listings, built from live Propalt letting and sales data. Which districts offer the best rental yields in the UK right now, and what does a headline gross yield leave out?
Which UK postcode districts have the best rental yields in 2026?
TS1 (Middlesbrough), TS3 (Middlesbrough) and L20 (Bootle) top the sample, all above 9% gross. The table below shows every district that passed our minimum sample rules.
| Rank | District | Area | Median asking rent (pcm) | Median price | Gross yield | Rental listings | SSTC sales |
|---|---|---|---|---|---|---|---|
| 1 | TS1 | Middlesbrough | £697.50 | £79,950 | 10.5% | 26 | 47 |
| 2 | TS3 | Middlesbrough | £645 | £82,500 | 9.4% | 27 | 46 |
| 3 | L20 | Bootle | £850 | £110,000 | 9.3% | 24 | 54 |
| 4 | L4 | Liverpool (Walton, Anfield) | £900 | £120,000 | 9.0% | 40 | 98 |
| 5 | ST6 | Stoke-on-Trent | £725 | £100,000 | 8.7% | 33 | 125 |
| 6 | NG7 | Nottingham | £1,100 | £160,000 | 8.3% | 81 | 70 |
| 7 | ST4 | Stoke-on-Trent | £795 | £120,000 | 8.0% | 54 | 103 |
| 8 | LS11 | Leeds (Beeston, Holbeck) | £897.50 | £137,500 | 7.8% | 30 | 42 |
| 9 | CF24 | Cardiff | £1,620 | £250,000 | 7.8% | 89 | 138 |
| 10 | L13 | Liverpool (Old Swan) | £900 | £140,000 | 7.7% | 26 | 75 |
| 11 | M14 | Manchester (Fallowfield, Moss Side) | £1,500 | £240,000 | 7.5% | 60 | 52 |
| 12 | HU5 | Hull | £725 | £130,000 | 6.7% | 40 | 192 |
| 13 | L6 | Liverpool (Kensington, Fairfield) | £750 | £135,000 | 6.7% | 28 | 73 |
| 14 | L7 | Liverpool (Edge Hill) | £693 | £140,000 | 5.9% | 24 | 25 |
| 15 | E17 | London (Walthamstow) | £2,400 | £750,000 | 3.8% | 28 | 177 |
Source: Propalt (October 2026). Rents: two and three bed terraced houses listed to let on Rightmove and Zoopla (deduplicated by property) on 26 October 2026. Prices: terraced homes that went sold subject to contract in Q3 2026.
A 10% gross yield on a £80,000 house and a 4% gross yield on a £750,000 house are different businesses, and the costs below decide which one pays.
How was this rental yield ranking calculated?
Each figure is a gross yield: annual asking rent ÷ median price, using one property type and one bedroom band on the rent side so that districts compare like with like.
- Rent. The median current asking rent for two and three bed terraced houses listed to let on Rightmove and Zoopla in each district on 26 October 2026, from Propalt's letting market activity data. Each property counts once, even if several agents list it, so the count is homes to let on those two portals, not every rented home. Listings below £450 a month were excluded, because in districts such as TS1 a large share of low-priced terraced listings are single rooms in shared houses, which would distort a whole-house rent.
- Price. The median price of terraced homes that went sold subject to contract on Rightmove in Q3 2026 (July to September), from Propalt's quarterly market data. This is a listing-level price; agreed sale prices only appear once HM Land Registry registers the sale.
- Minimum sample. At least 20 rental listings and at least 20 sold subject to contract sales per district. Where the count is even, the median is the average of the two middle values, which is why TS1 and LS11 show half pounds.
- Districts tested. We tested 28 districts. Thirteen failed the sample rules and are left out: BD3, BD7, BD8 (Bradford), B10 (Birmingham), BB1 (Blackburn), DN1 (Doncaster), WF1 (Wakefield), HU3 (Hull), SR4 (Sunderland), S2 (Sheffield), NE6 (Newcastle), L5 (Liverpool) and BS5 (Bristol). Some of these may well rank highly; we did not have enough live listings to say.
Two limits matter. The price side covers terraced homes of every bedroom count, while the rent side covers two and three beds only. And an asking rent is the landlord's opening figure; the agreed rent can be lower. Use the table as a shortlist for further work.
Our guide to UK property data sources explains where listing-level figures and registered sale prices each come from.
Why are the highest rental yields in the UK in the North East, Merseyside and Stoke?
Because rents and prices do not move together. Across the table, the median rent in E17 (£2,400) is 3.4 times TS1's, while the median price (£750,000) is 9.4 times higher. Low entry prices lift gross yield faster than rent levels can cancel it out.
The student districts tell a second story. NG7, CF24 and M14 have high rents for two and three bed houses (£1,100 to £1,620 a month) and mid-range prices, which puts them between 7.5% and 8.3%. L7 sits lower at 5.9%. Its median rent of £693 matches £160 a week converted to a monthly figure, which suggests some listings price per person rather than per house. We have kept it in, flagged.
High gross yields in the cheapest districts often come with longer voids, older stock and higher maintenance, so the next two sections matter more than the ranking.
How do you calculate gross rental yield by hand?
Gross rental yield is annual rent divided by the purchase price, multiplied by 100.
Gross yield (%) = (monthly rent × 12) ÷ purchase price × 100
Worked example using the L4 figures above:
- Monthly rent: £900
- Annual rent: £900 × 12 = £10,800
- Price: £120,000
- Gross yield: £10,800 ÷ £120,000 × 100 = 9.0%
Gross yield is quick and useful for comparing districts. It ignores every cost of owning and letting the property.
How do you calculate net rental yield?
Net rental yield takes the costs off the rent and adds purchase costs to the price.
Net yield (%) = (annual rent - annual running costs) ÷ (purchase price + purchase costs) × 100
A worked example on the same L4 house. The cost lines below are assumptions for illustration only, not Propalt data. Replace them with your own quotes.
| Line | Assumed amount |
|---|---|
| Annual rent | £10,800 |
| Void allowance (one month) | -£900 |
| Letting and management fees | -£1,300 |
| Insurance, safety certificates, licensing | -£600 |
| Repairs and maintenance | -£800 |
| Net operating income | £7,200 |
| Price plus purchase costs (tax, legal, survey) | £128,000 |
| Net yield | 5.6% |
On these assumptions a 9.0% gross yield becomes 5.6% net, before mortgage interest and income tax. Your own figure depends on your fees, your financing and your tax position.
To run the same test on a single property with your own costs, financing and exit, see our guide to analysing a property deal.
What does a headline rental yield leave out?
Four things change the return on any district in the table.
- Voids. Every month empty costs one twelfth of the annual rent. A district with plenty of rental listings may also be one where homes take longer to let.
- Section 24. Individual landlords cannot deduct mortgage interest from rental profits. Since the restriction was fully phased in for 2020/21, they receive a tax reduction at the basic rate (currently 20%) instead. The restriction does not apply to companies. A higher-rate taxpayer with a large mortgage can see a healthy gross yield turn into a thin post-tax return.
- Energy standards. The government response published in January 2026 confirms that private landlords in England and Wales will have to reach the EPC C equivalent for all tenancies by 1 October 2030, with a cost cap of £10,000 per property. For homes valued below £100,000, the maximum spend is 10% of the property's value. Several of the top districts have older terraced stock: in TS1, 19 of the 26 two and three bed terraced houses listed to let on Rightmove and Zoopla on 26 October 2026 carried an EPC rating of D or lower. Check the EPC before you price the deal. Our article EPC Data in the UK covers how to pull EPC data.
- Rooms and HMOs. A house let by the room can return far more than a whole-house rent, with licensing, management and Article 4 rules to match. Our piece on underwriting in an Article 4 area covers the HMO side.
Gross yield tells you where to look. Net yield after voids, tax and the 2030 energy standard tells you whether to buy.
How can you rerun this ranking for any postcode district?
The same calculation runs against the Propalt API or the Propalt MCP server in Claude or ChatGPT. Three calls give you the inputs: letting market activity for the rent sample (filtered by property type, bedrooms and asking rent), quarterly market data for the sold subject to contract price, and valuations if you want a property-level AVM instead of an area median. Our UK property data API developer guide covers getting started.
Rerun it monthly. Asking rents in this table were captured on a single day, 26 October 2026, and will move.
To connect the MCP to Claude or ChatGPT, follow our guide to using the Propalt MCP. Calls are credit-based, and the plans are listed on the Propalt AI pricing page.
📌 KEY TAKEAWAY
The best rental yields in the UK in Propalt's October 2026 sample sit in Middlesbrough (TS1 10.5%, TS3 9.4%), Bootle (L20 9.3%) and Liverpool L4 (9.0%), driven by terraced prices under £125,000. Gross yield is where the analysis starts. Voids, fees, Section 24 and the EPC C requirement for all tenancies by 1 October 2030 can take several points off before you see a pound. Run the numbers on the district you are actually buying in, with the method stated, and you can pull the same rent and price data yourself through the Propalt API or MCP.
SOURCES & DATA REFERENCES
- Propalt (October 2026). 'Letting market activity: two and three bed terraced houses for rent, asking rent £450 pcm and above, 26 October 2026.' Rent medians and listing counts for all 15 districts and the 13 excluded districts. Rightmove and Zoopla listings only, deduplicated by property; residential only; listings with unmatched addresses excluded. propalt.ai (Propalt API / MCP, letting market activity)
- Propalt (October 2026). 'Quarterly market data, Q3 2026, terraced homes: median sold subject to contract price and sold count (Rightmove, listing level).' Price medians and sales counts in the ranking table. propalt.ai (Propalt API / MCP, quarterly market)
- Propalt (October 2026). 'Letting market activity: two and three bed terraced houses for rent in TS1, asking rent £450 pcm and above, EPC rating D to G, 26 October 2026.' 19 of 26 listings rated D or lower. propalt.ai (Propalt API / MCP, letting market activity)
- GOV.UK (January 2026). 'Improving the energy performance of privately rented homes: government response.' EPC C equivalent by 1 October 2030 for all tenancies, £10,000 cap, 10% of value for homes under £100,000, England and Wales scope. gov.uk/government/consultations/improving-the-energy-performance-of-privately-rented-homes-2025-update/outcome
- GOV.UK (February 2025). 'Improving the energy performance of privately rented homes: 2025 update.' Consultation that preceded the 2026 response. gov.uk/government/consultations/improving-the-energy-performance-of-privately-rented-homes-2025-update
- Price Bailey (updated October 2026). 'A guide to Section 24: mortgage interest relief for UK landlords.' Basic rate (20%) tax reduction, phasing from 6 April 2017 to 2020/21, not applicable to companies. pricebailey.co.uk
