Is Liverpool still a good place to buy a buy-to-let property in 2026?

Liverpool still offers stronger fundamentals than most UK cities: rents rose 6.2% annually to £901 a month by May 2026 and prices are forecast to keep climbing (ONS Private Rental Market Statistics; property market forecasts, 2026). But the citywide average purchase, at £184,000 against £901 rent, only yields 5.9% gross, and once mortgage costs, fees and Section 24 tax are applied, the numbers are tight to negative for most ownership structures. Liverpool still works as a buy-to-let location if you buy below the average price point in a genuinely higher-yielding postcode, or hold through a limited company where Section 24 doesn't apply. Buying an average-priced property expecting a marketed 9% return is the mistake to avoid; check the actual price and rent of the specific property against our buy-to-let yield calculator before committing.

Why do property investment sites say Liverpool yields are 9% when the average is much lower?

Marketing figures usually come from a handful of cheap, high-yielding postcodes or from off-plan new-build schemes the site is selling, not from the citywide average price and rent. Liverpool's genuine citywide numbers, £184,000 average price against £901 average rent (ONS/Land Registry, April-May 2026), produce a 5.9% gross yield, well short of the 9% or 7-8% figures used in marketing (RWinvest, Northwood UK, 2026). Regional data adds to the confusion: Fleet Mortgages' Q1 2026 Rental Barometer put the North West's average buy-to-let yield above 8%, but that reflects professional landlords buying cheaper stock across the whole region through specialist BTL lending, not an average-priced Liverpool home. Always ask for the exact purchase price and rent behind any quoted yield before trusting the headline number.

What is Section 24 and how does it affect a Liverpool buy-to-let?

Section 24 stopped landlords deducting mortgage interest from taxable rental profit and replaced it with a flat 20% tax credit, in force since April 2020 (HMRC). On a typical £184,000 Liverpool purchase at 75% loan-to-value, the property is already close to breakeven before tax once mortgage interest, letting fees, insurance and a maintenance reserve are deducted. Section 24 then pushes a basic-rate taxpayer into a small monthly loss and a higher-rate taxpayer into a loss of roughly £166 a month, because the 20% credit is worth far less than the 40% relief a higher-rate landlord used to receive on mortgage interest. If you are a higher-rate taxpayer considering this purchase, model the numbers through a Section 24 tax calculator before assuming the marketed yield reflects what you will actually keep.

Which UK cities actually have the highest buy-to-let yields in 2026?

Regionally, the North East leads at 9.8% average yield, with Yorkshire and the Humber, the West Midlands, the North West, Wales and the East Midlands all averaging above 8% (Fleet Mortgages Rental Barometer, Q1 2026). At city level, the picture is more mixed: Manchester's typical sub-£220,000 buy-to-let stock yields around 6.6% gross (Hunters/rentalyield.uk, 2026), while Liverpool's citywide average sits at 5.9% (ONS/Land Registry, 2026). The gap between a strong regional average and a specific city or postcode's real number is exactly why a citywide or regional yield figure should never be the basis for a purchase decision. Always price the individual property against its own local rent, not the wider area's headline average.

Liverpool's 9% yield claim hides a £166 monthly loss

Every property investment site pushing Liverpool right now uses the same number: 9% yields, sometimes higher. If you're sitting on proceeds from a sale elsewhere in your portfolio and Liverpool keeps coming up as the answer, that figure is doing most of the persuading. It's also not what a typical Liverpool purchase actually returns, and running the real numbers changes the decision considerably.

Buy the average Liverpool property at the average Liverpool rent today and the gross yield is 5.9%, not 9% (ONS Private Rental Market Statistics / Land Registry, April-May 2026). Run that through mortgage costs, letting fees and Section 24, and a higher-rate taxpayer is left roughly £166 a month worse off. Even a basic-rate taxpayer is in the red, which is a different and more serious problem than the Section 24 story we've run on Manchester's buy-to-let market.

Where the 9% figure comes from, and why it isn't the citywide number

Liverpool's average house price was £184,000 in April 2026, provisional (ONS/Land Registry HPI), and the average private rent across the city reached £901 a month in May 2026, up 6.2% annually from £848 (ONS Private Rental Market Statistics, May 2026). Do the maths on those two citywide figures and the gross yield is 5.9%, before a single cost is deducted.

That's a healthy number by national standards, but it's a long way from the 9% figure marketed by some property investment companies (RWinvest, 2026), or even the 7% to 8% range quoted by letting agency guides (Northwood UK, 2026). Those figures are typically built on specific new-build schemes or the cheapest available postcodes, not the price a buyer actually pays for an average Liverpool home.

So if you're pricing a Liverpool purchase off a marketing yield figure rather than the citywide average, you're underwriting a return most buyers at that price point will never see.

Why the North West averages over 8% while Liverpool's own number is under 6%

This isn't just a marketing trick. Fleet Mortgages' Q1 2026 Rental Barometer, tracking real buy-to-let mortgage completions, put the North West's average rental yield above 8%, one of six English and Welsh regions to clear that threshold (Fleet Mortgages Rental Barometer, Q1 2026). That's a genuine, sourced figure, and it sits nowhere near Liverpool's own 5.9% citywide average.

The gap is explained by what each number actually measures. Fleet's regional figure reflects where professional landlords are actually completing mortgaged purchases across the whole North West, smaller towns and cheaper postcodes included, not an average-priced Liverpool property specifically. Liverpool's own citywide figure blends in higher-priced owner-occupier stock that rarely gets bought as a rental at all. Both numbers are correct; they're just not measuring the same thing.

So a strong regional average doesn't mean an average-priced Liverpool property gets you there. It means someone buying cheaper stock elsewhere in the region, or a specific below-average postcode, is what's pulling that regional figure up.

The cash flow before a penny of tax is due

Take a £184,000 purchase at 75% loan-to-value: a £138,000 mortgage against a £46,000 deposit. The average fixed-rate buy-to-let mortgage stood at 5.42% on 1 July 2026 (Moneyfacts). On an interest-only basis, standard for most buy-to-let lending, that's £623 a month in interest. Add a 12% letting agent management fee (£108), a one-month-a-year void allowance (£75), landlord insurance of around £24 a month (based on a median annual cost of £284.75, NimbleFins, 2026) and a 10% maintenance reserve (£90), and monthly outgoings come to £920. Against £901 in rent, that's already a loss of around £19 a month, before tax is even calculated. Check your own figures with our mortgage calculator.

It's also worth noting this deal barely clears mortgage lenders' affordability stress tests: rent of £901 against interest of £623 gives a rental cover ratio of roughly 145%, right at the edge of what many lenders require for a higher-rate applicant. Some higher-rate buyers may struggle to get this exact deal approved in the first place, not just to profit from it.

So before HMRC takes a single pound, the average Liverpool buy-to-let purchase is already running at a loss, not the healthy monthly income a 9% headline implies.

Section 24 turns a small loss into a £166 monthly loss

Since April 2020, mortgage interest is no longer deducted from taxable rental profit. Instead, HMRC taxes profit before interest relief, then hands back a flat 20% credit on the interest actually paid. On this property, annual rent is £10,812. Deduct the non-finance running costs (management, insurance, maintenance: £2,663 a year) and taxable profit before interest relief is £8,149. Annual mortgage interest is £7,480.

A basic-rate taxpayer owes 20% of £8,149 (£1,630), less a 20% credit on the £7,480 of interest (£1,496), for a net tax bill of £134 a year, or £11 a month. Add that to the £19 monthly shortfall already there before tax and they're losing about £30 a month. A higher-rate taxpayer owes 40% of £8,149 (£3,259), less the same £1,496 credit, for a net tax bill of £1,764 a year, or £147 a month. Add that to the same £19 shortfall and the property is losing roughly £166 a month. Run your own numbers through our Section 24 tax calculator before assuming a headline yield reflects what you'll keep, and see how the picture compares to Manchester's buy-to-let Section 24 numbers, where a stronger citywide yield left basic-rate landlords in modest profit.

The maths, in one place:

Purchase £184,000 at 75% LTV · Rent £901/month · Gross yield 5.9% · Cash flow before tax −£19/month · Basic-rate tax £11/month, net roughly −£30/month · Higher-rate tax £147/month, net roughly −£166/month.

So this isn't a Manchester-style story where only higher-rate taxpayers get squeezed. In Liverpool, at the citywide average price, the deal doesn't clear even for a basic-rate landlord once tax is added.

The stamp duty bill and the EPC deadline still to come

A £184,000 buy-to-let purchase in England also carries a one-off Stamp Duty bill of roughly £10,380, made up of £1,180 in standard rates plus a £9,200 buy-to-let surcharge at 5% of the full price (the surcharge rose from 3% to 5% at the Autumn Budget 2024). That's on top of the monthly losses above, not instead of them, and it needs to come from cash reserves before the property earns a penny.

Much of Liverpool's older terraced stock, the kind that dominates the city's rental market, will also need work to meet the government's confirmed requirement for rented homes in England and Wales to reach an Energy Performance Certificate rating of C or above by 1 October 2030 (GOV.UK Warm Homes Plan, 2026). Industry cost analysis puts the average spend at just under £6,900 per property, with a £10,000 cap (Property118 landlord cost survey, 2026), a cost our Inner London spotlight flagged as a compounding risk for older stock elsewhere too.

So if this property is already losing £166 a month after tax as a higher-rate landlord, an unplanned five-figure EPC bill arriving before 2030 doesn't just erode the return. It's a second bill on top of one you're already funding out of pocket.

What this means for you

The maths points toward one of three moves if Liverpool is genuinely on your shortlist. Buy meaningfully below the citywide average price in a postcode with verified higher rent, not a marketed yield figure, because the citywide numbers show the average purchase doesn't work at any tax band. Hold through a limited company structure, where mortgage interest remains a fully deductible cost against corporation tax rather than a restricted credit, though moving capital into a company structure needs modelling with an accountant rather than assuming it pays off automatically. Or treat Liverpool as a capital growth play rather than an income one, and stop pricing your expectations off a gross yield figure your tax position and financing costs never let you actually collect.

Frankly, if you're weighing Liverpool against a property you're already considering selling elsewhere, redeploying that capital into an average-priced Liverpool purchase at today's numbers is a downgrade dressed up as an upgrade. Most investors who run these numbers properly, rather than trusting the headline yield table, end up either hunting for a genuinely underpriced postcode or looking at a different city altogether. Very few decide the citywide average is worth buying once they've seen the after-tax cash flow modelled month by month.