Gross returns - the rent received before taking account of the cost of letting - such as management fees, maintenance, service charges ground rents and insurance varies between 7% and 10%. This can be less for very expensive properties.
The average rental return in Britain today hovers around the 10% mark and capital appreciation is likely to match, if not exceed, inflation for the foreseeable future.
As a rule of thumb from a landlords point of view, gross rents should be between 130% and 150% of the monthly mortgage payments. Factors affecting this and variable that apply are the type and length of mortgage, deposit paid, condition and type of property.
