UK property check, 2026

Does UK buy-to-let beat
a 7% ETF?

Enter your purchase price, mortgage details, and rental income, and the calculator works out your full stamp duty bill, net yield after Section 24 tax, and the exact sale price you need to beat a global equity index fund.

England England & NI Scotland Scotland UK Resident & Non-Resident
Total Cash Required at Completion
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Gross Yield

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Market gross: rent / price

Net Yield

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After all running costs (pre-tax)

After-Tax Cash-on-Cash

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Net CF / cash invested

01. Region & Buyer Type
Region
Property Status
Buyer Residency
Stamp Duty
Additional properties (buy-to-let, second homes) pay standard residential bands PLUS a 5% surcharge on every band (raised from 3% in October 2024). Effective rates: 5% (£0-£125k), 7% (£125k-£250k), 10% (£250k-£925k), 15% (£925k-£1.5M), 17% above.
CGT on disposal (2026):
Residential property: 18% (gains within basic-rate band) / 24% (above). No letting relief unless you lived in the property. SDLT, legal fees, survey costs, and selling costs are all deductible from the taxable gain, and this calculator applies them. Non-UK residents must file a 60-day CGT return after completion.
02. Purchase & Finance
£
Mortgage financing
Total Cash Required at Completion
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Deposit + Stamp Duty + legal + survey
03. Rental & Tax
£
Income Tax Band
£
For basic-rate: 18% on gains within basic band, 24% above. Leave 0 to assume all gains taxed at higher CGT rate.
Property total wealth vs ETF at 7% p.a. - 10yr hold - four growth scenarios
ETF at 7% p.a. Property: no growth (0%) Property: illustrative growth (3.4%) Property: growth scenario (5%) Property: growth scenario (7%)
Sale price required to beat ETF (after exit costs)
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Enter your figures above to see the breakeven sale price and required annual appreciation.
Gross Yield (market)
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Net Yield (pre-tax)
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After-Tax COC Return
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Annual Tax Bill
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What-if Scenarios

Four property price growth scenarios compared against your ETF alternative. Each shows total wealth at end of hold period: sale proceeds (net of CGT and 2% exit costs) plus all rental cash flow. CGT is calculated on the taxable gain after deducting SDLT, legal fees, survey costs, and selling costs. For basic-rate taxpayers, CGT is blended: 18% on gains within the basic-rate band, 24% above.

Scenario Property value Total wealth Return on cash vs ETF
Enter figures above
Acquisition Costs
ItemAmount
Enter figures above
Annual Running Costs
ItemPer Year
Enter figures above
Analysis
Enter your figures above to generate a personalised buy-to-let analysis.
UK property checks, reviewed 2 October 2026
Long-Run Price Growth
The chart uses illustrative growth scenarios. Historical price changes do not establish a future return on the property you are buying.
Gross-yield evidence
Paragon's Q1 2026 lending sample reported 6.96% average gross yield. It is a dated lender sample, not a city ranking or a forecast. Use this property's rent and price.
Market Liquidity
Completion time depends on the buyer, finance, title and transaction chain. Allow for delays rather than assuming a guaranteed sale window.
Key Risk
Section 24 mortgage interest restriction hits higher-rate taxpayers hardest. A 40% taxpayer with a 75% LTV mortgage on a low-yield property may show negative post-tax cash flow even with 6% gross yield.
Watch Point
England's Renters' Rights Act changes started on 1 May 2026, including the Section 21 ban with transitional rules. Other UK nations have separate tenancy rules. Check possession, notice and compliance requirements.
Non-UK Expat Note
Gulf-based UK expats: +2% SDLT surcharge on purchase. UK rental income taxable via self-assessment. CGT return within 60 days of sale. Consider whether Non-Resident Landlord Scheme (NRLS) applies.
Methodology

How the numbers work

Stamp Duty

Since October 2024, the additional dwelling surcharge in England was raised from 3% to 5%. On a £350,000 property, a buy-to-let buyer now pays about £25,000 in stamp duty, ten times the £2,500 a first-time buyer would pay. Non-UK residents add another 2% on top of every band.

This calculator computes stamp duty precisely using the tiered band structure, then adds it to your total acquisition cost. Scotland uses LBTT (Land and Buildings Transaction Tax) plus ADS (Additional Dwelling Supplement) at 8% of the full purchase price.

Section 24 and the tax trap

Before April 2020, landlords could deduct mortgage interest in full as a business expense. Section 24 abolished this, replacing it with a flat 20% tax credit on finance costs, whatever your marginal rate. A 40% taxpayer effectively pays an extra 20% tax on their interest cost.

How the calculator works out the tax: rental income minus deductible expenses (management, maintenance, insurance, void allowance) equals taxable profit. Mortgage interest is NOT deducted here, but you receive a 20% credit after computing your tax bill. For highly leveraged higher-rate taxpayers, the after-tax cash-on-cash return can be sharply negative even with healthy gross yields.

Note: This is a simplified Section 24 estimate. HMRC's full calculation limits the 20% credit to the lower of finance costs, property business profits, and adjusted total income. It cannot create a refund, and unused finance costs may carry forward. For edge cases (very low profit or very high interest), this calculator may overstate the tax credit.

How the ETF comparison works

Your total cash invested at year zero (deposit plus all acquisition costs for a mortgage purchase, or full price plus friction for cash) is placed into both scenarios simultaneously. The ETF line grows at the rate you choose, compounding annually (7% is a sample net-return assumption, not a forecast or a verified fund return).

The property line tracks your equity at zero price appreciation: equity = (purchase price minus outstanding loan) plus cumulative after-tax net cash flow. If property equity cannot match the ETF portfolio even at zero growth, the property needs price appreciation to justify the commitment, and the verdict panel tells you exactly how much.

ETF comparison note: The ETF line and property chart lines are shown pre-CGT for a like-for-like comparison. The verdict and what-if tables deduct property CGT but leave the ETF CGT-free, as if the ETF were held in an ISA or SIPP wrapper. For a taxable GIA comparison, ETF CGT would also reduce the ETF terminal value.

Understanding breakeven appreciation

The verdict panel solves for the sale price that makes your property portfolio exactly as large as the ETF portfolio at your chosen hold period, after deducting CGT (calculated on the gain net of SDLT, legal fees, survey costs, and selling costs) and 2% estate agent and legal exit costs.

The required growth rate is the rate needed to match your chosen ETF assumption under the modelled costs and tax. It does not establish that either return is likely. Test lower rent, higher financing costs and lower sale prices before relying on the comparison.

Sources checked 2 October 2026: Paragon's dated yield sample and GOV.UK tenancy changes. For financing examples and their fees, see the reviewed buy-to-let guide.

Frequently Asked Questions

Why does SDLT make buy-to-let so expensive in 2026?

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Since October 2024, the additional property SDLT surcharge in England was raised from 3% to 5%, adding it to every band. On a £300,000 property, a buy-to-let investor now pays approximately £20,000 in SDLT, versus £5,000 for a standard residential buyer. Non-UK residents pay an additional 2% surcharge on top of every band. These upfront costs push up the price growth you need to beat an ETF, particularly for shorter hold periods where the fixed acquisition cost is amortised over fewer years.

What is Section 24 and how does it affect higher-rate taxpayer landlords?

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Section 24 of the Finance Act 2015, fully implemented since April 2020, removed the ability to deduct mortgage interest as a business expense. Instead, landlords receive a 20% tax credit on all finance costs, the same as a basic-rate taxpayer always received. For higher-rate (40%) and additional-rate (45%) taxpayers, this is a big tax rise. A higher-rate landlord paying £10,000 in annual mortgage interest now owes £2,000 more in tax than they did pre-2020, purely because of Section 24. Highly leveraged properties can show positive gross cash flow but negative after-tax returns for 40% taxpayers.

Which UK cities offer the best buy-to-let yields in 2026?

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City averages and postcode rankings depend on the source, sample and date. Paragon's Q1 2026 lending-data sample reported 6.96% average gross yield, not a guaranteed national return. Use achievable rent for the actual property, then deduct vacancy, service charges, repairs, finance and tax.

Should a Gulf-based UK expat return to buy buy-to-let property?

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Gulf-based expats have a higher bar to clear. They pay the 2% non-UK resident SDLT surcharge on purchase, are taxed on UK rental income via self-assessment (requiring NRLS compliance), and pay CGT at 18% or 24% on disposal, with no access to letting relief since 2020. Despite this, a high-yield Northern city property (8-10% gross) with a modest mortgage, managed through an agent, can still beat an ETF at 5-7% price appreciation, particularly for basic-rate taxpayers. Use this calculator to test your specific numbers before committing.