Landlord costs surge as income stalls – HMRC

The declared expenses of the UK’s individual landlords and partnerships jumped 11% in a year while their total property income barely moved, new HMRC figures reveal.

Allowable property expenses reached £34.75 billion in 2024/25, compared with declared income of £58.99 billion.

The income figure was virtually unchanged from £59 billion in the previous tax year.

Average property income per landlord edged up from £20,300 to a five-year high of £20,500.

However, average expenses rose 12% to £13,700, underlining the faster growth in the costs being reported to HMRC.

Landlord expenses rocket

The longer-term figures show an even bigger gap with property income increasing by 26%, while declared expenses climbed by 56% between 2020/21 and 2024/25.

Residential finance costs were the largest expense, accounting for £12.82 billion, or 37% of everything claimed.

Some 1.15 million landlords reported costs in this category.

Repairs and maintenance produced the next largest bill at £6.41 billion, followed by other allowable expenses at £4.58 billion and legal, management and professional fees at £4.16 billion.

Rent, rates and insurance accounted for a further £3.81 billion.

Most landlords claim expenses

Around 1.92 million landlords, or 66.2%, claimed for repairs and maintenance, while 66.1% reported rent, rates or insurance costs.

In total, 2.54 million landlords claimed at least one form of property expense, representing 87.7% of those covered by the statistics.

HMRC recorded 2.88 million unincorporated landlords declaring property income in 2024/25, up from 2.81 million four years earlier.

Of these, 2.85 million were individuals completing Self Assessment returns.

The remaining 30,000 were partnerships, which declared £9.18 billion of the total property income.

‘Modest’ landlord returns

The data also highlights the relatively modest sums declared by a large section of the sector.

Around 1.3 million landlords reported property income of £10,000 or less during the year, equivalent to 45% of the unincorporated landlord population.

Property income remained concentrated among landlords living in London and the South East.

London-based landlords accounted for 17% of those declaring income but received 28% of the total.

Where landlords live

Together, London and the South East were home to 33% of landlords and accounted for 44% of declared property income.

They also represented 52% of all property expenses, despite making up 34% of landlords claiming costs.

Furnished holiday lets accounted for a comparatively small part of the market.

Around 130,000 unincorporated landlords declared £2.46 billion from UK furnished holiday accommodation, representing 4% of total property income.

The data covers income declared through Income Tax Self Assessment and excludes incorporated property businesses.

They also leave out individuals whose property income did not meet the threshold for inclusion in Self Assessment.