7–12% Yields Overseas vs 4% in the UK: A Head-to-Head Comparison for 2026
A rigorous comparison of net rental yields across UK, Portugal, Phuket, Spain, and Florida in 2026. Real numbers, real costs, real returns, with a worked example for each market.
The Question Every UK Landlord Should Be Asking
If you own UK buy-to-let property and are not regularly comparing it to international alternatives, you are managing your portfolio with one eye closed.
UK buy-to-let delivered average gross yields of 4.2% in 2025 (Hamptons International). After mortgage costs, management fees, maintenance, void periods, and Section 24, most higher-rate taxpayers net 1.5–2.5% on capital deployed. Compare that to:
- Portugal: 6.9% gross, net 4.5–5.5% for non-residents
- Phuket: 7–12% gross on long-term, 10–14% on managed short-term
- Spain (repossessions): Effective yields of 8–12% when purchase discount is factored in
- Florida (vacation rental): 8–14% gross, net 5–9% after management
The same capital produces dramatically different returns depending on where it is deployed. Here are the worked examples.
Market 1: UK Buy-to-Let
Example: 2-bed flat in a Northern English city, £210,000 purchase price.
| Item | Amount |
|---|---|
| Property price | £210,000 |
| Stamp duty (5% BTL surcharge) | £16,800 |
| Legal fees + survey | £2,500 |
| Total capital deployed | £229,300 |
Cash purchase returns: Gross rent £10,080 (4.8%), minus letting agent (13%), insurance, and maintenance = net £6,070 (2.6% yield).
After tax (40% higher-rate): Rental income taxed at 40% on £10,080 = £4,032. After-tax income: £2,038. After-tax net yield: 0.9% - below the risk-free rate of UK government bonds.
Market 2: Portugal - Porto City Apartment
Example: 1-bed apartment in Porto's Bonfim district, €220,000. Total capital deployed: €241,010 (~£206,000) including IMT, stamp duty, and legal fees.
| Item | Annual (€) |
|---|---|
| Gross rent (7.5%) | €16,500 |
| Management, IMI tax, insurance, maintenance | -€4,150 |
| Net income | €12,350 (5.1% yield) |
Tax: Flat 25% Portuguese non-resident rate on net taxable income. UK double taxation treaty applies. After-tax net yield: ~3.8%.
Porto property prices have grown an average of 7.8% per year since 2017 (INE). Total returns including capital growth significantly outperform UK equivalents.
Market 3: Phuket - Managed Villa Programme
Example: Studio/1-bed in a managed complex in Bangtao or Kamala. Total capital deployed: ~£139,500 (THB 6.2M).
Guaranteed rental programme (8%): Net income THB 480,000 / £10,800. Net yield: 7.7% with management included.
Short-term rental programmes (non-guaranteed): 10–14% gross, with 30–40% management fees, netting 6–9%.
Thai tax enforcement on non-resident overseas rental income is effectively nil in practice. UK tax: declare to HMRC; limited UK-Thailand double taxation agreement - professional structuring advice recommended.
Market 4: Spain - Bank Repossession
Example: 2-bed apartment in Murcia, purchased at 35% discount to €200,000 market value. Total capital deployed: €151,850 (~£129,900) including ITP tax, legal fees, and light refurbishment.
Renting at market rates produces net income of €10,370 (6.8% on capital deployed). But the real story: day one, you hold €70,000 of unrealised equity - an immediate 32% capital gain on invested capital, plus running income while you hold.
Tax: Non-resident rental income taxed at 19–26%. Comprehensive UK–Spain double taxation treaty.
Market 5: Florida - Short-Term Vacation Rental
Example: 3-bed vacation home in Kissimmee, $325,000. Total capital deployed: $349,750 (~£276,550).
At 65% occupancy and $185/night average: gross income $43,900, minus management (25%), HOA, property tax, insurance, and maintenance = net $19,775 (5.7% yield).
At 75%+ occupancy: Net yields of 7–9% are achievable. Income is USD-denominated - a natural hedge against sterling weakness (GBP fell from $1.70 in 2014 to $1.27 in 2025).
Side-by-Side Comparison
| Market | Gross Yield | Net Yield (pre-tax) | Tax Structure | Entry Cost |
|---|---|---|---|---|
| UK buy-to-let | 4.2% | 2.6% | High - Section 24, 40% IT | 8–10% |
| Portugal (long-term) | 6.9% | 5.1% | Flat 25% on net income | 8–10% |
| Phuket (managed) | 8–12% | 6–9% | Minimal | ~3% |
| Spain (repossession) | 7% (on cost) | 5–7% | 19–26% on net | 10–15% |
| Florida (vacation) | 10–14% | 5–9% | 30% gross / net election | 3–4% |
What the Numbers Are Saying
UK buy-to-let is not terrible because of property quality or tenant demand. It is structurally uncompetitive because of a tax and regulatory regime - Section 24, stamp duty surcharges, EPC mandates - that no international market replicates.
The same capital, deployed with the same discipline into Portugal, Phuket, or Florida, produces 2–4x the after-tax income. The investors who recognised this 3–4 years ago and began diversifying internationally are already ahead. Those making the same realisation now still have the opportunity.
Access Off-Market Deals in All Five Markets
HPA provides UK investors with pre-vetted, off-market property deals in Portugal, Phuket, Spain, and Florida - with full due diligence packs, yield analysis, and legal framework documentation.
Apply for membership and receive deal alerts every week.
About the author
Chris White has 40 years of international property investment experience, with over $1 billion in sales across four continents. He has been featured on Channel 4, Sky News, and The Telegraph. He is the founder of Hot Property Alerts.
Free Report
Get our Q1 & Q2 2026 Yield Index
Compare rental yields, capital growth, and risk scores across 7 international markets. Data-driven intelligence for serious investors.
Download the Yield IndexContinue Reading
Bali, Thailand or Portugal: Where Should UK Investors Over 55 Buy in 2026?
Is Bali Property a Good Investment in 2026? An Honest Assessment for UK Buyers
