Yield Vs bank savings rate for BTL property?

A bank account does not offer capital gains or losses.

What are the costs of transitioning to a bank account?(capital gains tax, agent fees, void cost etc)

Will you achieve market value on sale?

What do you think interest rates will be in 5 years time? What do you think the rental yield will be in 5 years time?

Is the yield you talk about net or gross?

Do you factor in your own time as a cost or factor for making a decision?

property will increase in value over the long term and you can take out funds via a btl mortgage tax free whenever you need to. landlords just need to keep their heads and not panic.

You will need to pay18-28% on the capital gain, plus selling costs, but then the money is yours! Not a good time to sell though, market prices have reduced.

Basically depends on whether you can be bothered with the increasing hassle and risks of being a landlord.

BTL is not no/low risk, so a bank account probably isn't the best comparison. If you invest a percentage in, say, high yield funds or tracker funds you could potentially have similar or better return for similar risk to a BTL, and no hassle! Speak to an independent financial advisor (incidentally, St James Place are NOT independent financial advisors).

Legal and General are a FTSE 100 company. The current yield is 8.38% and is due to increase each year by 5%. Longer term there should be capital growth.
LEGAL & GENERAL CONFIRMS FIVE-YEAR TARGETS
The blue chip financial services firm said it therefore remained on track to achieve its five-year ambitions, including generating £8bn-£9bn of capital between 2020 and 2024. It also expects to grow earnings per share faster than dividends per share, and cumulatively for net surplus generation to exceed dividends.

The dividend remains on track to grow by 5% per annum to the 2024 full-year, it added.

In this situation I personally would carry out 3 exercises 1) the sums on selling today 2) where to invest & what reasonable returns to expect from the invested net sale proceeds 3) emotional reasons for selling/keeping.
1) Crude sums today on selling (apologies in advance for math errors & missed things to consider):-
Sell at £260,000 (hopefully - beware it is a dead market presently)
Less Estate Agents (assume 1.5% + VAT = £4680) & Solicitor fees (assume £1200)
= net proceeds of £254,120 vs £130780 assumed acquisition costs = £123,340 net gain i.e. bought at £128,000 plus stamp duty £1280 & solicitor costs of say £1500 = £130,780 plus any capital improvements - examples; home improvements, lease extension but for this exercise assume none if all works were repairs & off-settable against income in year of expenditure & assume no lease extension costs.
£123,340 net gain less £6,000 personal allowance x 2 = £12,000 assuming jointly owned = £101,340 taxable gain = £50,670 each that is taxable part at 18% if your current incomes do not exceed the basic rate tax band of £50,270 & the balance at 28%. Assume net gain straddles both tax bands 50/50 = £11,654 CGT each x 2 = £23,308 total CGT payable within 60 days. This assumes you never lived in the property.
Therefore net sale proceeds are £254,120 less £23,308 CGT = £230,812 (assuming no mortgage to be repaid) less loss of min 3 months rent = £3450 during the sales / completion process = £227,362 if to be sold with vacant possession.
2) £227,362 invested
Assuming £1150 pm rent previously achieved assume nets down to £900 pm net of costs (assuming agent fees of 7.5% + VAT = £103.50 pm & no mortgage & an average of £246.50 pm / £2958 pa repair & maintenance costs etc) = a return on capital of 4.75% pa would be required (£900 x 12 divided by £227,362) which would be wholly achievable in this current climate BUT if the £227,362 was on cash deposit your capital value would be fixed & not grow & therefore your income would not be rising unless deposit interest rates increase & if interest rates start to reduce back down in the next 12-36 months as is anticipated, then your interest would reduce on top of your capital being eroded by the ravages of inflation. If invested in assets such as Gov. Bonds, Equities, Managed Funds (bonds, unit trusts & other fund types), you may get a higher net return but past performance is no guarantee to future performance as unit values can go down as well as up which in turn will impact on the income yield & these investment types are usually more volatile than bricks & mortar. For example, at its current share price, Legal & General offers an 8.42% annual yield to shareholders which is a bumper payout, but it’s only the seventh-highest on the FTSE 100.
But dividends change constantly as Companies cut or increase their payouts, and a change in share price affects what you get back as a percentage, and never forget when investing that your capital is always at risk i.e. the value of your investments can go down as well as up and you may get back less than you put in. It would therefore be wise to spread your investment & always take advantage of your allowances.
3) Emotional decision
We are a relatively small island with an ever-growing population & therefore property to buy/rent will always be a necessity & be in demand which has & will continue to drive up values & rents over the longer term. But with it comes a headache of tenant issues, property maintenance, law & regulatory changes. However, it is a tangible asset one can raise finance against unlike other investments & rents over the longer term tend to only go in one direction... upwards even if capital values are temporarily rocky or going southwards.
The only headaches with other investments is the worry about the risk to your capital & whether the income can continually withstand economic impacts/changes & the ravages of inflation. ALWAYS read up on matters & always seek financial advice from a reputable Financial adviser.

Reply to the comment left by Laura Delow at 12/08/2023 - 10:34
I suggested Legal and General even though it is not the highest paying FTSE 100 share. You also need to look at how likely is it that dividend can be maintained or even increased. The 2022 dividend was covered 1.98 times, which means only about half of its earnings were paid out in dividends. So if profits/earnings fell a bit then it could still afford to maintain the same dividend payout.

Sell and re-invest.
Some 6 month fixed rate bonds are running nearer 6%, some 1 yr ones are over 6%.

Then in 2028 (IF) EPC/other landlord bashing legislation as come in, ex rental property prices (and 2030 for owner occupied properties) will likely come tumbling down as even more of us get out, think about coming back into the PRS if that is where you want to be.