Property investment vs savings: What offers the highest returns in 2026?

January 6, 2026

UK buy-to-let property is one of many options for people who want to invest and grow their wealth. It is increasingly popular, and many people now opt to invest in property instead of relying on traditional savings rates, with forecasts already projecting property to outperform savings again in 2026.

In fact, the performance gap may grow even wider thanks to interest rate cuts and property market growth. Learn everything you need to know about property investment vs savings in 2026 with our guide:

What are the average buy-to-let rental yields in the UK?
Where can investors get the best yields in 2026?
What is the average UK savings rate?
How do savings rates compare to property investment in 2026?

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What are the average buy-to-let rental yields in the UK?

A good buy-to-let yield in the UK is anything from 5% to 8%, although a yield above 6% is considered to be very good according to Natwest. The yield is your rental income expressed as a percentage of the original purchase price, and it depends on a range of factors, including:

Property location
Property quality
Demand in the market
Construction rates

All of these can impact your decision on whether a property is worth investing in from the point of view of rental yields.

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Where can investors get the best rental yields in 2026?

Arguably, the most important factor in determining rental yields is location. For example, if prices are high but rental growth is slower, like in the South East, your rental yield will shrink over time. In comparison, property markets in the high-performing North West tend to have lower entry points and higher rates of rental growth.

Data from Zoopla shows that locations in the North West will offer gross rental yields – the income before costs – of more than 8%. Manchester city centre buy-to-let property and Liverpool apartments for sale have performed in this upper bracket for many years and represent ideal locations for investors to buy in 2026 for high rental yields.

In fact, buying in 2026 is key to achieving the highest rental yields in the North West. Forecasts from Savills show the average property value in the region is set to increase by 27.6% by 2030. That means buying now when prices are lower will protect your rental yield.

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What is the average UK savings rate?

In contrast, the average UK savings rate is tied to the base rate of interest set by the Bank of England. There are some elements of market demand, where banks will compete to get new customers with slightly improved rates, but in general, all savings account rates will be within a similar range.

Savings rates have been elevated over the historic average in recent years, thanks to a high base rate of interest. Rising inflation and global economic challenges meant interest rates across the board went up, including savings accounts. However, they are now falling again as economic stability returns and the Bank of England cuts rates.

The best rates as of December 2025 are as follows, according to Which?:

Instant access - 5%
One-year fixed rate saver - 4.5%
Two-year fixed rate saver - 4.45%
Three-year fixed rate - 4.25%
Four-year fixed rate - 4.32%
Five-year fixed rate - 4.3%

In 2026 and beyond, the base rate of interest is forecast to be cut further. Analysts are anticipating two cuts in the next six months, then another possible cut by the end of 2026. That will lower the base rate by 0.50%-0.75% and decrease the rate of interest on savings accounts accordingly.

For savers, the rate of return will become less attractive at a time when alternatives like UK buy-to-let property for sale will be growing.

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How do savings rates compare to buy-to-let property investment in 2026?

All signs point to savings rates falling further below property investment yields in 2026. Building a strong financial portfolio means moving your money around to the places where returns are rising. In 2026, that means property could be a more attractive and profitable option than savings accounts for many people.

We always recommend you talk to your personal financial advisor before making any decisions, but part of that discussion means having as much information as possible.

Discover our latest property opportunities and contact our team today to learn more about the potential returns on offer with buy-to-let investment in 2026.

Property investment vs savings: What offers the highest returns in 2026?

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