While net rental yields have increased over the last year, they sit at just 3.4% once the costs of maintaining a buy-to-let property are accounted for.

This is according to the latest research from lettings and estate agent, Benham and Reeves which shows that currently, investing in the average buy-to-let property across the UK will set you back £289,824, with the average property currently commanding £1,276 per month in rent.

This equates to an income generated to the tune of £15,312 per year, a gross rental yield of 5.3%.

However, Benham and Reeves then looked at the net yield secured once the cost of maintaining a buy-to-let is accounted for. The costs incurred include letting agent fees (£1,837), general maintenance costs (£2,898), the cost of an annual gas safety certificate (£80), an electrical safety report certificate (£225) and landlord insurance (£427).

In total, these additional costs come to £5,468 for the average UK landlord. ,

As a result, the net yield secured on the average buy-to-let property comes in at just 3.4%, albeit this figure has climbed from 3% over the last year. However, these ongoing costs don’t include the average cost of repaying a buy-to-let mortgage which currently sits at £1,201 per year.

Additional research by Benham and Reeves also highlights how inflation is impacting buy-to-let profitability when it comes to the cost of furnishing a rental home.

Benham and Reeves director Marc von Grundherr comments:“While gross yields have remained fairly favourable the reality of buy-to-let investing is that there are a whole host of additional costs that need to be considered and accounted for, all of which eat further into the profit margins of landlords.

“This is a small detail that the Government has largely neglected to consider when waging war against the sector and introducing numerous legislative changes designed to dent profitability.

“What’s more, the cost of goods remains considerably higher than they were just a year ago and so even furnishing a property to an acceptable standard can be an expensive endeavour”.

He adds: “The silver lining is that while the average net yield may sit at just 3.4% currently, this has increased in strength over the last year and so the consistency of buy-to-let investing remains, albeit not to the same extent as we’ve previously seen.”