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.

Chris White·5 February 2026·4 min read

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

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Related Reading

Best Countries to Buy Property Abroad for UK Investors (2026 Rankings) — All 10 markets ranked with yields, tax rules, and visa routes.
Section 24 in 2026: Why UK Landlords Are Moving Overseas — The full tax maths on UK BTL vs overseas.
Dubai Property Investment: UK Buyer's Guide — 0% income tax, 6-8% yields.
Greece Property Investment: Golden Visa Still Open — EU residency from €250k.
Overseas Property Mortgage Guide — How to finance overseas purchases.

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.

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