Property income declared by unincorporated landlords has climbed to a record £55.5 billion in 2023–24, according to new HMRC figures. While headline numbers suggest healthy returns, landlords warn that Section 24 mortgage relief restrictions mean many are earning far less in real terms than official statistics imply.
Income rises but averages hide landlord squeeze
HMRC’s latest property income statistics show 2.86 million unincorporated landlords declared rental income last year, almost all of them individual taxpayers rather than companies. On paper, average declared income per landlord rose to £19,400—up from £18,300 a year earlier and the highest figure in five years.
Yet averages disguise deep divides. More than 1.36 million landlords reported £10,000 or less in rental income, highlighting how a small group of portfolio landlords skew the numbers upwards. “These headline figures do not reflect the reality for many small landlords who face higher borrowing costs and tighter regulation,” said Ben Beadle, chief executive of the National Residential Landlords Association (NRLA).
For buy-to-let investors, Section 24 remains a sticking point. Introduced from 2017, the rules phased out mortgage interest relief for individuals, meaning finance costs can no longer be fully offset against rental income. “What looks like £19,000 on a tax return often translates into half that once mortgage payments and tax liabilities are deducted,” explained north London landlord Sarah K, who rents two flats in Enfield. “The margins have never felt thinner.”
Record expenses point to rising landlord costs
The statistics also show landlords declaring record-high expenses. Residential finance costs accounted for £9.05 billion in 2023–24—almost a third of all deductible outgoings. Other common costs included insurance, repairs, and maintenance, with over two-thirds of landlords declaring at least one of these categories.
Regional disparities are stark. London landlords made up just 18% of expense claims but accounted for 29% of the total value, reflecting both higher rents and costlier upkeep in the capital. Combined with the South East, the two regions represented nearly half of all declared landlord expenses nationwide.
Letting agents say this mirrors their day-to-day experience. “We’ve seen landlords spending significantly more on compliance and property standards, especially with the looming pressure of EPC upgrades,” noted David Alexander, chief executive of DJ Alexander. “What looks like higher income is being eroded by higher costs at every turn.”
Furnished holiday lets remain small but significant
HMRC also highlighted the contribution of furnished holiday lettings, which brought in £2.43 billion—around 4% of total property income. While this remains a small share of the market, policy changes loom large. The government has already signalled plans to scrap favourable tax treatment for short-term lets, potentially redirecting more landlords back to the long-term rental market.
Some industry voices suggest the data underscores the resilience of landlords in the face of shifting rules. “Despite the pressures of Section 24, regulatory change, and higher interest rates, landlords continue to provide the bulk of rented homes in this country,” said mortgage broker Andrew Montlake of Coreco. “It’s a testament to their persistence, though one wonders how much longer they will put up with such headwinds.”
Editor’s view
These figures will no doubt be seized on by critics as evidence of landlords doing well, but the detail tells a different story. Average incomes mask thin margins, rising finance costs, and regional disparities that leave many landlords questioning the viability of staying in the sector. The bigger question is whether government policy is setting up the market for long-term stability—or simply driving more landlords out.
