Dubai Rental Yields vs UK Buy-to-Let: Side-by-Side
Strip away the marketing and run the numbers properly. Here's how a £400,000 Dubai apartment compares to a £400,000 UK buy-to-let on net yield, tax, and total return.
UK landlords have been quietly migrating capital to Dubai for the last three years — and the numbers explain why. This is a like-for-like comparison of a £400,000 investment in each market, run honestly, with all the costs UK buy-to-let promoters tend to skip.
The headline yield
UK buy-to-let, 2026: average gross yield of 4.5% nationally, 3–4% in London and the South East, 6–7% in the North East and parts of the North West (where yield comes with weaker capital growth and more management complexity).
Dubai, 2026: average gross yield 6–9% on well-chosen apartments, occasionally double-digit in JVC and similar value-driven communities. So a £400,000 Dubai apartment generates roughly £28,000–£36,000 of gross rent vs. £18,000–£20,000 from the equivalent UK property.
From gross to net — the cost stack
UK side: 5–10% management fee, mortgage interest (deductible only via the basic-rate tax credit since 2020), insurance, certifications (gas, electrical, EPC), wear-and-tear, void periods (national average 3–4 weeks per year), and an increasingly aggressive selective-licensing regime in many councils.
Dubai side: 5% management fee, annual service charges (AED 12–25 per sq ft — model this carefully), Ejari registration, DEWA standing charges, and shorter average voids (1–2 weeks) thanks to a more liquid rental market.
Tax — where the gap really opens
UK buy-to-let income is taxed at your marginal rate (20%, 40%, or 45%). Mortgage interest is no longer fully deductible — it's now a 20% tax credit, which means higher-rate landlords pay tax on revenue, not profit. A higher-rate landlord with a 75% LTV mortgage can easily see effective tax rates above 50% of net rental profit.
Dubai rental income is taxed at 0% in the UAE. As a UK resident you still declare it on UK self-assessment, but with no UAE tax to credit and a much cleaner mortgage interest position on UAE-side debt, the effective tax leakage is typically lower than on a UK property.
On exit: UK CGT at 18–24%. Dubai CGT in the UAE: zero. (UK CGT still applies to UK-resident sellers — see our tax guide for the full picture.)
Worked example — £400,000 each side, cash purchase
UK buy-to-let, Manchester city centre 2-bed: £20,000 gross rent, £4,500 costs and voids, £15,500 net before tax. Higher-rate landlord pays £6,200 tax. Net cash in pocket: ~£9,300. Net yield on price: 2.3%.
Dubai, JVC 2-bed: £30,000 gross rent (AED 140,000 approx), £6,500 costs and service charges, £23,500 net before tax. UK higher-rate tax on that profit: £9,400. Net cash in pocket: ~£14,100. Net yield on price: 3.5%.
Difference: £4,800 more cash per year, every year, on the same capital — and that's before any capital growth premium.
Capital growth side
UK house prices grew ~5% nationally over the 5 years to 2025. Dubai grew 140%+ over the same period off the back of the 2021 reset. Forward growth is impossible to guarantee, but Dubai's structural drivers — population growth, business migration, Golden Visa demand, and 2040 master plan — remain intact. The UK's are not.
The honest caveats
Dubai is a foreign-currency asset (AED, pegged to USD). For sterling-based investors that's a feature, not a bug — but it does add a layer to consider.
Service charges in Dubai can rise meaningfully on premium buildings. Always model the highest charge band, not the launch-year teaser.
Selection matters more than market. The averages above are achievable, but only if you buy the right unit in the right building. That's what we do.