Yields on the South Coast have remained competitive against most of the UK outside London. But the picture varies significantly depending on which town, which postcode, and which property type you are looking at.
This article provides a realistic overview of the yields available in 2026 for buy-to-let investors in Portsmouth, Hampshire, and the Isle of Wight.
What we mean by yield
Gross yield is the annual rent divided by the purchase price, expressed as a percentage. A property bought for GBP 225,000 renting for GBP 1,100 per month produces a gross yield of 5.9 per cent.
Net yield accounts for costs — mortgage interest, letting agent fees, maintenance, insurance, voids, and ground rent. A property with a 6 per cent gross yield might produce a 4 per cent net yield after costs.
Both measures matter, but net yield is what you actually keep. When comparing investment opportunities, always ask for the net yield, not just the headline gross figure.
Portsmouth: the strongest yields on the South Coast
Portsmouth consistently offers the best yields in Hampshire. The combination of affordable property prices, strong rental demand, and a diverse tenant base makes it the standout location for BTL investment.
Typical gross yields by Portsmouth postcode in 2026:
– PO1 (City Centre / Portsea): 6.0 per cent to 7.5 per cent
– PO2 (Copnor / Hilsea / Baffins): 5.5 per cent to 6.5 per cent
– PO3 (Fratton / Buckland / Stamshaw): 5.5 per cent to 7.0 per cent
– PO4 (Southsea / Eastney): 5.0 per cent to 6.5 per cent
– PO5 (Southsea seafront): 4.5 per cent to 5.5 per cent
A two-bedroom terraced house in Fratton at GBP 210,000 renting for GBP 1,100 per month gives a gross yield of 6.3 per cent. After mortgage costs at 75 per cent LTV and a 5 per cent interest rate, the net yield is approximately 4.2 per cent.
Southampton: consistent but competitive
Southampton offers yields slightly below Portsmouth in most postcodes, but the larger city size means more property choice and a deeper rental market.
Typical gross yields in Southampton:
– SO14 (City Centre): 5.0 per cent to 6.5 per cent
– SO15 (Shirley / Freemantle): 5.5 per cent to 6.5 per cent
– SO16 (Bassett / Swaythling): 4.5 per cent to 5.5 per cent
– SO17 (Portswood / Highfield): 5.0 per cent to 6.0 per cent
– SO18 (Bitterne / Thornhill): 5.0 per cent to 6.0 per cent
The university drives strong demand in Portswood and Swaythling, but the higher property prices in these areas compress yields compared to Portsmouth.
Isle of Wight: higher yields, different market
The Isle of Wight offers attractive yields but a distinct market dynamic. Property prices are generally lower than the mainland, and rental demand is driven by tourism, local residents, and people relocating for lifestyle reasons.
Typical gross yields on the Isle of Wight:
– Newport: 5.5 per cent to 6.5 per cent
– Ryde: 5.0 per cent to 6.0 per cent
– Sandown / Shanklin: 5.5 per cent to 7.0 per cent
– Ventnor: 4.5 per cent to 5.5 per cent
A three-bedroom house in Newport at GBP 195,000 renting for GBP 950 per month gives a gross yield of 5.8 per cent. The lower purchase price means better capital efficiency, but the seasonal nature of tourism demand means void periods can be longer in winter months.
Other Hampshire locations
– Fareham: 4.5 per cent to 5.5 per cent
– Gosport: 5.0 per cent to 6.5 per cent
– Havant: 5.0 per cent to 6.0 per cent
– Waterlooville: 4.5 per cent to 5.5 per cent
Gosport offers some of the highest yields in Hampshire due to lower property prices, but demand is more localised than Portsmouth.
How to improve your yield
Buy below market value
The single most effective way to improve yield is to buy below market value. A property purchased at GBP 210,000 that is worth GBP 240,000 gives you built-in equity and a higher yield than buying at full market price.
Add value through refurbishment
A cosmetic refurbishment — new kitchen, bathroom, decoration, flooring — can increase rent by 15 to 25 per cent. On a property renting for GBP 1,000 per month, a GBP 10,000 refurbishment that increases rent to GBP 1,200 pays for itself in under three years through additional rent.
Choose the right property type
Yields on flats are often higher than houses in the same postcode because flats cost less to buy. But flats come with service charges and ground rent that reduce net yield. Always calculate net yield including all costs.
What to expect realistically in 2026
Across the South Coast, realistic gross yields for standard BTL in 2026 are:
– Good: 6 per cent to 7 per cent
– Average: 5 per cent to 6 per cent
– Below average: 4 per cent to 5 per cent
Yields above 7 per cent are achievable with HMO conversion, value-add refurbishment, or opportunistic BMV purchases. Yields below 4 per cent are difficult to justify unless you are investing primarily for capital growth.
The longer view
South Coast property prices have shown consistent growth over the long term. Combining a 5 per cent rental yield with 3 per cent annual capital appreciation produces a total return of approximately 8 per cent per year — a solid performance for a relatively low-risk asset class.
At Xelox Properties, we help investors find properties that meet their yield targets. If you know what yield you need, we can source the right property in the right location to deliver it.
Contact Xelox Properties today to arrange a no-obligation conversation about how we can help with your property investment goals.