Almost a quarter of landlords have considered leaving the rental market because of Making Tax Digital, according to new Landlord Studio research that also puts the average monthly compliance burden at 13.6 hours and £3,311 a year.
The survey of 500 landlords and 500 letting agents, conducted by Censuswide in late May, suggests the strain is no longer just about learning a new HMRC system. It points to a broader cost and admin problem as quarterly reporting beds in for landlords already inside the first MTD threshold and others prepare for the next phase in April 2027.
For landlords, the immediate point is not simply whether MTD is understood in theory. It is whether record keeping, quarterly submissions and software choices are now adding enough friction to change behaviour on rents, profitability and even whether some investors stay in the sector.
MTD burden goes beyond software sign-up
Landlord Studio said 22 percent of landlords had considered quitting the rental market because of the MTD burden. The same research found 59 percent remained worried about making mistakes or facing penalties, even though 94 percent of landlords and agents said they were confident they understood the rules.
That gap matters. Landlords may feel broadly aware of the new regime, but still lack confidence when it comes to the day-to-day work needed to stay compliant. The research also found 53 percent said both the time involved and the cost had risen over the past year, while 89 percent said higher admin and compliance costs made rent rises more likely.
Logan Ransley, co-founder of Landlord Studio, said: “Landlords are clearly feeling the pressure of MTD, both in terms of time and cost, and for some that pressure is serious enough to make them question whether continuing to let property is worth it.”
He said support already existed through agents and better digital systems, but the findings still suggest many landlords are carrying more tax admin than they expected when the new reporting rules began.
Why the next threshold still matters
MTD for Income Tax became mandatory from April 2026 for landlords with more than £50,000 in qualifying income. That threshold is due to fall to £30,000 from April 2027, widening the number of landlords who need quarterly digital updates and an end-of-year finalisation.
This follows Landlord Knowledge’s report on MTD going live for the first wave of landlords, which highlighted how few had signed up ahead of the switch. The latest figures suggest the issue has now moved from readiness to workload, cost and the risk that compliance pressure feeds through into rents and landlord exit decisions.
There is also a practical warning in the data for landlords still relying on spreadsheets. Landlord Studio said 39 percent continue to use spreadsheets or manual methods, even though MTD compliance still requires digital links and, in many cases, separate bridging software. Landlords who have delayed moving to a cleaner system may find the real burden lands later, not sooner.
Recent LK coverage has already shown the direction of travel, including the government’s launch of an MTD software finder before the first filing phase began. This new survey adds a sharper cost estimate and a clearer picture of how much working time landlords believe the change is already consuming.
The company’s primary source page for the agent-facing system behind the research is Nexus by Landlord Studio.
What this means for landlords
- If you’re still using spreadsheets: check now whether your process actually meets HMRC’s digital link rules rather than assuming a spreadsheet alone is enough.
- Watch for: the April 2027 threshold drop to £30,000, which will bring a wider group of landlords into quarterly reporting.
- Bottom line: the cost of MTD is not just software fees – it is time, admin risk and, for some landlords, another push factor in an already pressured market.
Editor’s view
MTD was sold as modernisation, but for many landlords it still looks like extra admin wrapped in better language. The more useful question now is not whether digital reporting is coming – that part is settled – but whether landlords can keep compliance costs from eating further into already thin margins.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 7 July 2026
Sources: Landlord Studio, Censuswide, HMRC
Related reading: HMRC confirms 118,000 landlords face quarterly tax reporting from April
