The average rental yield across the UK is in the region of 3.5%, but varies widely depending on the location of the property. London has some of the lowest rental yields because, although monthly rental costs are high, property prices are the highest in the UK. However, investing in London property can also give bigger returns long-term as property prices increase at a faster rate.
Some of the best rental yields are in the North West and North East, where rental demand is strong but property prices remain comparatively low, and in university towns and cities where demand for rental properties is always strong.