Stamp duty (SDLT)
England & NI residential rates for 2026: 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1.5m, 12% above. Additional-property purchases add 5% to every band (applies from £40,000). First-time buyer relief: 0% to £300,000, 5% to £500,000, no relief above £500,000. Rates change at Budgets — verify before exchange.
Verdict thresholds
BTL — Stacks: cashflow ≥ £150/mo, cash-on-cash ≥ 6%, and passes the lender ICR test. Tight: cashflow ≥ £0 and ICR passes. Otherwise it doesn't stack.
Flip — Stacks: profit ≥ £15,000 and profit ≥ 15% of GDV (the margin most experienced flippers demand as a buffer against overruns). Tight: profitable with ≥ 10% of GDV.
BRRR — Stacks: post-refinance cashflow ≥ £100/mo, ICR passes, and either ≥ 75% of your cash is recycled or ROI on money left in ≥ 10%. Tight: cashflow ≥ £0 and ICR passes.
These are deliberately conservative screening thresholds, not gospel. A deal that "doesn't stack" here may still suit a capital-growth strategy — but you should know you're buying negative cashflow, not discover it.
ICR (Interest Coverage Ratio)
Lenders test whether monthly rent covers 125–145% of the mortgage payment calculated at a stressed rate (typically pay rate + 2%, minimum ~5.5%). Higher-rate taxpayers borrowing personally are usually tested at 145%; limited companies and basic-rate taxpayers at 125%. A failed ICR means most lenders will cap your loan below the LTV you've entered.
Yields & returns
Gross yield = annual rent ÷ purchase price. Net yield = (annual rent − running costs) ÷ (purchase price + refurb). Cash-on-cash = annual pre-tax cashflow ÷ total cash invested (deposit + SDLT + refurb + buying costs).
Tax estimate
Personal ownership: since Section 24, mortgage interest is not deductible from rental profits; a 20% tax credit on interest applies instead. The estimate here taxes (rent − running costs) at your marginal rate, then deducts the 20% interest credit. Limited company: (rent − costs − interest) at the corporation tax rate selected. Both are simplified year-one estimates ignoring allowances, other income interactions, and dividend extraction — get advice from an accountant.
Flip finance
Bridging interest is modelled as simple monthly interest on the day-one loan for the full term, plus the arrangement fee. Exit fees, broker fees, and drawdown refurb finance are not modelled — add them to buying costs if applicable. Flip profits are shown pre-tax (personal flips are usually taxed as income, not CGT).