North West's 8.8% yield claim hides a £192 monthly loss

Every quarter your Yorkshire portfolio's Section 24 bill lands, you've asked the same question: is the capital sitting in these three properties working as hard as it could somewhere else? Official data now gives that question a genuine answer, and it isn't the one the marketing usually points you to. The North West grew faster than any other English region in the year to June 2026, comfortably ahead of the North East and the rest of the pack. That is a real result, not a headline built on a cherry-picked postcode. Whether it also pays as an average-priced buy-to-let purchase is a different question, and it's worth running the numbers before you redeploy a penny.

At the region's real average price and rent, a marketed regional yield of up to 8.8% becomes 5.24% gross once you check it against the North West's genuine average purchase. Add mortgage costs, letting fees and Section 24, and a higher-rate taxpayer buying at that average ends up roughly £192 a month worse off than break-even.

The fastest-growing region in England, and it isn't close

The average house price across the North West was £220,000 in June 2026, up 4.7% on the year, the highest annual growth rate of any English region and well ahead of the North East's 4.3% and the England-wide average of 1.8% (HM Land Registry/ONS UK House Price Index, published 19 August 2026). Prices also rose 0.4% month-on-month, one of only three English regions to post a monthly gain that month. Set against the national UK average of £272,000 (HM Land Registry/ONS UK House Price Index, June 2026), the North West remains meaningfully cheaper than the country as a whole, which is a large part of why it's growing this fast: buyers priced out of the South East and East of England are looking further north for value, and the region has been named among the areas seeing the biggest wave of ex-rental stock reaching the market as landlords exit ahead of the Renters' Rights Act (Pepper Money analysis, 2026), which adds fresh supply without yet cooling demand.

So if you're weighing whether this growth is a genuine signal or noise, the North West's number isn't a rounding error against a flat national market, it's the standout regional result this year, and that's exactly the kind of story worth checking rather than dismissing or blindly trusting.

The marketed 8.8% yield, checked against the region's real numbers

Regional rental yield tables currently put the North West's average buy-to-let yield at 8.8%, the second-highest of any English region after the North East (Fleet Mortgages Rental Barometer, Q2 2026). That figure is built from Fleet's own buy-to-let completions, which skew toward professional landlords buying cheaper, higher-yielding stock through specialist lending, not the region's genuine average-priced home. It's a real number, but it isn't the number an investor buying at the North West's actual average will see.

The region's average private rent was £961 a month in June 2026 (ONS Price Index of Private Rents), up from £954 in May. Set that against the average sold price of £220,000 and the real gross yield is 5.24%, a full 3.6 percentage points below the marketed regional headline. This is the same claim-versus-reality gap already logged in Manchester's marketed 9% yield, which calculated to an actual 6.6% once checked against the city average, and in Liverpool's marketed 9% claim, which came out at 5.9% citywide. Both of those cities sit inside this same North West region, and both told the identical story: a strong headline number built on a subset of stock, not the average purchase.

So treat any North West yield figure you're shown, whether it's a city, a postcode or the whole region, as a claim to verify against the actual price and rent of the property in front of you, not a number to trust at face value.

The cash flow at 75% LTV, before tax

Buy at the North West's average price of £220,000 with a 75% loan-to-value buy-to-let mortgage and you're putting down a £55,000 deposit against a £165,000 loan. At the current average buy-to-let fixed rate of 5.42% (Moneyfacts, 1 July 2026), that's £745 a month in interest on an interest-only basis, the standard structure for most buy-to-let lending.

Against £961 a month in rent, strip out a 12% management fee (£115), a maintenance reserve of 5% of rent (£48), landlord buildings insurance of £312 a year (£26 a month, ABI Premium Tracker, early 2026) and a one-month annual void allowance (£80), and you're left with £692 a month in net operating income before the mortgage is paid. Set that against the £745 monthly interest bill and the property runs at roughly £54 a month out of pocket before any tax is due.

So this is a purchase that starts in the red before tax even enters the picture, which means every void month, rate rise or repair bill this year makes the position worse, not better.

Section 24: what it costs at each tax band

Because mortgage interest can no longer be deducted as a business expense, a landlord pays income tax on the full rental profit before interest relief and claims only a 20% credit against the interest paid, capped at that profit figure whenever interest exceeds it. On this purchase, annual mortgage interest of £8,943 already exceeds the £8,298 profit before interest relief, so the credit is capped at 20% of £8,298, which is £1,660 a year, or £138 a month.

For a basic-rate (20%) taxpayer, tax due on the £8,298 profit is also £1,660, almost exactly matching the capped credit, so the position stays close to the roughly £54 a month pre-tax loss. For a higher-rate (40%) taxpayer, tax due is £3,319, leaving £1,659 after the credit, roughly £138 a month, which takes the total loss to around £192 a month, or £2,304 a year.

So being a basic-rate taxpayer doesn't rescue this purchase, it just stops Section 24 from making an already loss-making deal worse, and a higher-rate taxpayer carries the full extra hit on top of a position that was underwater to begin with.

Stamp duty adds another £12,900 before you have collected a penny in rent

The North West sits entirely in England, so Stamp Duty Land Tax applies, not Scotland's Land and Buildings Transaction Tax or Wales's Land Transaction Tax. Additional residential properties, including every mortgaged buy-to-let purchase, carry a 5% surcharge on top of the standard bands, raised from 3% on 31 October 2024 at the Autumn Budget. On a £220,000 purchase, that means 5% on the first £125,000 and 7% on the remaining £95,000, a total bill of £12,900.

Set that against the monthly cash flow figures above and the stamp duty bill alone is worth more than five and a half years of the higher-rate shortfall, paid upfront before the first month's rent has landed, on a property that is already losing money every month. Run your own numbers through our stamp duty calculator and our Section 24 tax calculator before making an offer.

So on a deal that starts underwater before tax, the upfront stamp duty bill isn't a rounding error, it's years of the eventual monthly shortfall paid in one lump sum, which changes how quickly, or whether, this purchase can realistically pay you back.

What this means for you

The North West's 4.7% growth is genuinely the strongest of any English region this year, and that part of the story holds up. But the maths points toward treating the regional average purchase as a capital-growth bet rather than the income play an 8.8% headline yield implies, because at the region's real average price and rent it's losing money before Section 24 even applies. If you're redeploying capital here, the more sensible route is a verified outperforming town such as those flagged by portfolio investors buying below the £230,000 mark around Wigan or St Helens, or a specific postcode with rent confirmed against comparable local lets, not the regional average. Frankly, if you're a higher-rate taxpayer, a purchase that can't clear a modest pre-tax surplus by a reasonable margin isn't worth a £12,900 stamp duty bill, because Section 24 turns a thin position into a real loss rather than a manageable one. Much of the North West's cheaper terraced stock, the kind most likely to sit below the target rating, will also need EPC upgrades before the 1 October 2030 deadline, with costs capped at £10,000 per property and fines of up to £30,000 for non-compliance (Warm Homes Plan, GOV.UK, published 21 January 2026, subject to final legislation), so check the current rating before you factor a property into your numbers, not after you've exchanged. Most investors who run this specific calculation end up looking at a named outperforming town or postcode within the region, rather than the regional average, which is exactly where the real 4.7% growth story is playing out.