Landlords spend between 25% and 45% of their gross rental income on running costs, including maintenance, servicing, insurance, utilities, professional fees and regulatory compliance.

Industry research by Pegasus Insight shows that as prices continue to rise, property maintenance and repairs remain the single largest cost faced by all landlords, accounting for between 31% and 39% of total portfolio expenditure, depending on property type.

Its latest Landlord Trends Q3 2025 report reveals that for non-HMO landlords, the average annual expenditure is £19,605, with 39% of that spent on maintenance, upkeep and repairs, 13% on management and letting fees and 10% on improvements to comply with energy efficiency standards.

Costs

For HMO landlords, whose running costs can add up to 45% of their rental income, annual average expenditure is £35,720 with 31% spent on maintenance, 19% on fees and 7% to comply with EPC standards.

The primary difference in spend distribution between HMO and non-HMO landlords is on utility bills, which is more than four times higher for HMO landlords (16% vs 4%) who more commonly include these in the rent.

This research underlines the growing cost pressures facing landlords as they seek to maintain standards and comply with an expanding regulatory framework, according to founder Mark Long.

Scale

He says maintenance and repairs have always been a core cost for landlords, but there’s now a step-change in scale. “Even with yields at multi-year highs, a growing share of rental income is being absorbed by day-to-day running costs and compliance demands,” adds Long.

“For many landlords, particularly those with older stock or more complex portfolios, the challenge is no longer generating income, it’s protecting margins in the face of rising costs.

“The risk is that sustained increases in upkeep costs ultimately feed through into higher rents, as landlords look for ways to fund the ongoing investment required to keep properties in good condition.”

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