Landlords’ expenses have risen by more than twice as much as their rental income during the past five years, according to new HMRC figures.

Property rental income statistics show that unincorporated landlords declared £34.7 billion of allowable expenses in 2024-25 against £58.9 billion of rental income, however five years ago the figures were £22.3 billion and £46.6 billion. Expenses have therefore soared by 56% while income has risen by 26%, meaning that the share of rental income consumed by costs has climbed from 47% to 58%.

On a per-landlord basis, average rental income reached £20,500 in 2024-25, the highest in five years, while average declared expenses reached £13,700, according to the figures which cover 2.88 million unincorporated landlords filing self-assessment – individuals and partnerships – who declared property income. In the most recent year alone, total expenses rose 11%.

Largest

Finance costs were the largest individual expense, with landlords declaring £12.8 billion in residential finance costs, accounting for 37% of all expenses claimed against UK property income. They were claimed by 1.15 million landlords, an average of £11,148 each. Repairs and maintenance were another significant cost, with 1.92 million landlords, or 66%, declaring such expenses totalling £6.41 billion.

Phil Shelley, chair of Hello Neighbour, says that a sector housing a fifth of the country can’t absorb costs rising at twice the rate of income indefinitely. “Landlords are being asked to fund upgrades the country wants through a tax system that treats them worse than a company holding the identical building,” says Shelley. “Policy needs a second setting that helps compliant landlords meet the standards rather than only penalising the minority who do not.”

HMRC reports that the number of individual landlords fell by 20,000 in the latest year, from 2.87 million to 2.85 million, although the overall number of unincorporated landlords edged up from 2.87 million to 2.88 million because of partnerships.

NRLA

Chris Norris, chief policy officer at the NRLA says it’s not surprising to see a slight dip in landlord numbers, as many are considering whether they can remain in the sector in the face of ongoing financial and regulatory pressures. “Anecdotally, this reflects what we are seeing at the NRLA, with some landlords leaving the market while others who remain are expanding their portfolios,” he tells LandlordZONE. “This could help explain why rental income has remained relatively resilient despite the overall number of landlords falling.

"That this has happened in the period running up to the implementation of the Renters' Rights Act is telling. Landlords are facing a more complex and costly legislative environment, with lower profits and higher taxes making many reconsider their place in the market. To prevent more landlords from exiting the private rental market, ministers should scrap the stamp duty surcharge on new rental homes, reconsider the planned income tax rise on rental income, and deliver the court reform landlords were promised."

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