Landlord Costs Are Rising Faster Than Rental Income, what the Latest HMRC Figures Mean for You!
New data from HMRC has confirmed what many landlords have been feeling for a while, running a rental property is getting more expensive and income isn’t keeping pace.
What the numbers show
HMRC’s latest landlord statistics covering the 2024/25 tax year show that the UK’s £2.88 million individual landlords and partnerships declared a combined £58.99 billion in rental income almost identical to the year before.
Average income per landlord reached £20,500, the highest figure in five years.
But the real story is on the cost side.
Allowable expenses claimed by landlords rose 11% year on year to reach £34.75 billion even though income barely moved.
In other words the gap between what landlords are bringing in and what it costs to keep a property compliant and tenant ready is widening.
Around 88% of landlords declared some form of expenses while just over 12% declared none at all often a sign of very simple portfolios or properties that are mortgage free and low maintenance.
Why costs are climbing
A few likely drivers stand out for landlords right now:
- Compliance costs — EPC upgrades, safety certificates and preparing for the next wave of Renters’ Rights Act requirements all add up.
- Maintenance and repairs — materials and tradesperson costs have remained stubbornly high.
- Insurance — landlord insurance premiums have risen across the market in the last couple of years.
- Finance costs — mortgage rates remain elevated compared to pre 2022 levels for landlords remortgaging or refinancing.
What landlords can do
- Review your expense claims. Make sure you’re claiming everything you’re entitled to insurance, letting agent fees, repairs, ground rent and finance costs where applicable. A quick chat with your accountant this autumn could be worthwhile.
- Budget for compliance now, not later. With the Renters’ Rights Act’s next phase approaching getting your paperwork and property records in order now avoids a costly scramble later.
- Consider a portfolio health check. If margins are tightening, it may be worth reviewing which properties are working hardest for you and which are quietly costing more than they earn.
Rental income might be holding steady but the cost of doing business as a landlord is clearly rising.
Staying on top of your expenses and planning ahead for the next round of regulatory change is the best way to protect your margins in the year ahead.
Thinking about how these trends affect your own portfolio? Get in touch with the Horizon Lets team for a chat about your properties.
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