The UK's unincorporated landlords declared almost £59bn of property income in 2024/25, but the headline income number conceals a rapidly changing cost base. HMRC's newly published figures show total expenses rising 11% in a single year, with residential finance costs becoming by far the largest individual expense category.
HM Revenue & Customs' new Property Rental Income Statistics provide one of the clearest official views of the economics facing individuals and partnerships that own UK rental property.
Some 2.88 million unincorporated landlords declared £58.99bn of property income in 2024/25. That was almost exactly the same as the £59bn recorded for 2023/24, despite average income per landlord increasing slightly from £20,300 to £20,500.
Costs moved very differently.
Total allowable property expenses reached £34.75bn, increasing 11% in a year and 56% compared with 2020/21.
The most significant line for professional landlords and their advisers is finance.
HMRC recorded £12.82bn of residential finance costs in 2024/25. That represented 37% of all allowable property expenses in the dataset and was exactly twice the £6.41bn declared for repairs and maintenance.
HMRC's New Landlord Numbers
2.88 million unincorporated landlords declared income from renting UK property in 2024/25.
Total property income was £58.99bn, broadly unchanged from £59bn in the previous year.
Total declared allowable expenses reached £34.75bn, increasing 11% year on year and 56% compared with 2020/21.
Residential finance costs were the largest expense category at £12.82bn, representing 37% of all expenses reported.
These statistics cover taxpayers reporting property income through Income Tax Self Assessment. Incorporated property businesses are not included.
Rental Income Has Levelled Off After Four Years of Growth
HMRC's five-year dataset shows property income increasing substantially between 2020/21 and 2023/24 before effectively flattening in the latest tax year.
Total declared income rose by £12.3bn, or 26%, between 2020/21 and 2024/25. The number of unincorporated landlords reporting property income also increased, from 2.81 million to 2.88 million over the period.
But the latest year looks different.
Aggregate property income was £58.99bn in 2024/25 compared with £59bn in 2023/24.
Average income per landlord did edge higher, reaching a five-year high of £20,500 compared with £20,300 the year before, but the overall pool of declared income stopped growing.
That makes the movement in expenses considerably more important.
Average Landlord Expenses Have Reached £13,700
HMRC says average allowable expenses reached £13,700 per landlord in 2024/25.
That is 12% higher than the previous year and 54% above the £8,900 average recorded in 2020/21.
The longer-term comparison is particularly striking because total expenses have grown considerably faster than total property income.
Between 2020/21 and 2024/25, total property income increased by 26%.
Over the same period, total expenses increased by 56%.
The HMRC statistics are not themselves a measure of net landlord profitability, and the categories should not be treated as a substitute for the accounts of an individual property business.
They do, however, illustrate why gross rental income alone is becoming a progressively less useful measure of portfolio performance.
Finance Is Now the Largest Declared Property Cost
The breakdown of the £34.75bn expense total makes the financing issue particularly clear.
Residential finance costs accounted for £12.82bn.
Repairs and maintenance accounted for £6.41bn.
Other allowable expenses totalled £4.58bn, while legal, management and professional fees accounted for £4.16bn. Rent, rates and insurance represented another £3.81bn.
In other words, residential finance costs alone were greater than repairs and maintenance and legal, management and professional fees combined.
For landlords carrying substantial debt, the mortgage structure is therefore not simply a financing detail sitting beneath the property investment.
It can be one of the largest variables determining the economics of the portfolio.
The Cheapest Individual Mortgage Is Not Always the Best Portfolio Structure
The natural response to higher finance costs is to search for a cheaper mortgage.
That is important, but it is only part of the analysis for a professional landlord with several properties.
A portfolio might contain ten mortgages arranged at different times, with different lenders, LTVs, fixed-rate expiry dates and rental coverage positions.
One property may have substantial unused equity.
Another may be highly geared.
A third may be producing a strong rental yield but carrying disproportionately expensive debt.
A fourth may be approaching refinance with a lender whose stress-testing requirements restrict the available loan even though the portfolio as a whole is financially strong.
Reviewing those mortgages individually can miss the balance-sheet question:
Is the debt allocated efficiently across the portfolio?
What Should a Portfolio Debt Margin Review Examine?
For each property, a useful review can map:
- current property value;
- gross rental income;
- mortgage balance;
- actual annual interest cost;
- current LTV;
- interest coverage ratio;
- current mortgage rate and product expiry;
- early repayment charges;
- equity tied up in the property;
- cash flow after finance costs;
- potential refinance capacity; and
- whether equity could be more efficiently deployed elsewhere.
The next step is to model those properties together rather than treating each mortgage as an isolated transaction.
£2m of Portfolio Debt Makes Small Differences Material
The impact becomes obvious at scale.
A landlord with £2m of mortgage borrowing does not need a dramatic pricing difference for finance costs to move materially.
A 0.25 percentage-point difference across £2m of debt equates to £5,000 a year before considering fees or changes in borrowing structure.
A 0.50 percentage-point difference equates to £10,000.
But even that calculation can be too simplistic.
The more valuable question may be whether the landlord actually needs £2m of debt allocated in its current form.
A low-LTV property could potentially support more borrowing while another asset is deleveraged. A disposal might release enough equity to change the refinancing requirement elsewhere. Capital could potentially be raised from one asset rather than another where lender criteria or rental coverage make that more efficient.
Those decisions can affect interest costs, cash flow, liquidity and the amount of capital available for future acquisitions.
Rolling Every Mortgage Onto a Product Transfer Can Hide the Portfolio Problem
Product transfers can be convenient.
They may avoid a full remortgage process, new valuation or legal work, depending on the lender and transaction.
For some landlords, retaining the existing lender will be the correct decision.
The risk arises when convenience becomes the default strategy across an entire portfolio.
A landlord might renew five separate mortgages over several years without ever reconsidering whether those five loans still represent the most appropriate overall debt structure.
The portfolio may have changed substantially since the original mortgages were arranged.
Property values may have increased at different rates. Rental income may have changed. Some properties may now have significant equity while others have become less attractive investments. The landlord's wider income, tax position and future objectives may also be different.
A product transfer can solve the immediate mortgage expiry without answering any of those questions.
Multiple Mortgage Maturities Create an Opportunity to Reset the Portfolio
Professional landlords approaching several fixed-rate maturities in a relatively short period have a particularly strong reason to review the portfolio as a whole.
Rather than simply asking which product replaces each expiring mortgage, the landlord can establish the total borrowing requirement for the next phase of the portfolio.
That might involve refinancing some properties while leaving others untouched.
It could involve releasing capital from one property to reduce borrowing elsewhere.
A landlord planning a disposal may decide that refinancing a particular asset makes little sense if it is likely to be sold shortly afterwards.
Conversely, an asset the landlord expects to hold for another decade may justify a different approach to the term and structure of the debt.
The appropriate outcome depends on the portfolio, but the decision should be made deliberately rather than property by property as each mortgage reaches maturity.
Some Properties May Be Consuming Too Much Equity
Finance efficiency is not only about interest cost.
A professional landlord may have several hundred thousand pounds of equity concentrated in a property that generates only a modest return on that capital.
That does not automatically mean the property should be sold or refinanced.
There may be good reasons to retain low gearing, particularly where the landlord values resilience or is approaching retirement.
But the amount of equity tied up in each asset should at least be visible.
For an acquisitive landlord, the difference between 40% and 60% LTV on a £1m property can represent £200,000 of capital that might otherwise be available for another purchase, refurbishment or wider investment requirement.
The financing discussion therefore needs to consider both the cost of debt and the opportunity cost of equity.
Interest Coverage Can Determine Where Debt Can Actually Sit
Moving debt around a portfolio is not simply an accounting exercise.
Buy-to-let lenders assess rental coverage and apply their own stress rates and interest coverage requirements.
A property with substantial equity may not necessarily support the desired loan if the rent is insufficient under the lender's stress test.
Conversely, a higher-yielding property may support a larger mortgage even if the landlord originally financed it conservatively.
Property type can also materially change lender appetite.
HMOs, multi-unit freehold blocks, holiday lets, semi-commercial properties and larger portfolios may require different specialist lenders and underwriting approaches from a conventional single-unit buy-to-let.
That is why portfolio optimisation has to be based on the finance actually available rather than simply the theoretical equity in each asset.
London and South East Landlords Account for a Disproportionate Share of the Economics
HMRC's geographical figures add another dimension.
Landlords based in London and the South East represented 33% of unincorporated landlords declaring property income in 2024/25, but accounted for 44% of total declared property income.
The concentration is even greater when expenses are considered.
HMRC reports that landlords based in London and the South East accounted for 52% of all allowable property expenses.
There is an important technical qualification: HMRC assigns the geography according to the landlord's registered address, not the location of the rental property. The statistics therefore do not establish that 52% of expenses relate to properties physically situated in London and the South East.
Nevertheless, they demonstrate the concentration of property income and expenses among landlords based in the two regions.
For Willow, that is particularly relevant because higher property values can translate relatively modest changes in leverage or mortgage pricing into significant cash amounts.
A London Portfolio Can Have Plenty of Equity and Still Have a Margin Problem
Consider a landlord with several properties acquired over the past 15 years.
The portfolio may have appreciated substantially, creating significant net equity.
On paper, the landlord looks extremely well capitalised.
But property wealth and portfolio cash flow are different things.
If mortgages originally priced at much lower rates have refinanced at higher costs, the amount of cash generated after interest can be materially reduced even where rents have increased.
That landlord may not need to sell property.
They may not even need every mortgage to be refinanced.
They may instead need to establish whether the current debt is sitting against the right assets, whether refinancing dates should be coordinated and whether part of the portfolio should carry more or less leverage.
Landlords Considering Disposals Should Review the Debt Before Selling
Selling a property can change the financing of the entire portfolio.
A landlord may decide to dispose of an underperforming asset because the rental yield or capital outlook no longer justifies retaining it.
But before completing the disposal, it can be useful to understand how the sale proceeds affect the remaining mortgages.
Should the proceeds reduce debt?
Could part of the capital be retained for another acquisition?
Will selling the property remove security supporting another facility?
Are early repayment charges involved?
Would the remaining portfolio refinance differently after the disposal?
The property investment decision and mortgage decision are therefore closely linked.
Ownership Structure Is a Tax Question Before It Is a Mortgage Question
The HMRC statistics require particular care around incorporation.
The dataset covers unincorporated landlords because it is derived from Income Tax Self Assessment returns.
It does not include incorporated businesses with property income.
The figures should therefore not be used to argue that a landlord should move personally owned properties into a limited company.
Transferring existing property into a company can create significant tax and legal consequences, potentially including Capital Gains Tax, Stamp Duty Land Tax and other transaction costs depending on the circumstances.
There may also be financing implications because company buy-to-let lending is underwritten differently from personal borrowing.
Whether a particular ownership structure is appropriate is a matter for the landlord's qualified tax and legal advisers.
Once that structure has been determined, Willow can assess the debt that can sit around it.
Accountants Are in the Best Position to Spot the Margin Squeeze
For professional introducers, HMRC's data creates an especially strong conversation with landlord accountants.
The accountant sees the actual numbers.
They can see when gross rental income has increased but the client's underlying cash position has not improved.
They can see the finance costs being reported against the property business and how those costs compare with previous years.
They may also know that several mortgage maturities are approaching or that the client is considering selling assets.
The accountant does not need to recommend a mortgage or determine how the portfolio should be financed.
The useful referral trigger is much simpler:
Rental income looks healthy, but finance costs are consuming too much of the margin.
A Debt Schedule Can Turn That Observation Into an Actionable Review
A portfolio debt review does not initially require complex information.
For each property, the starting schedule can record the property value, rent, mortgage balance, lender, rate, product expiry date, repayment basis and monthly payment.
That immediately creates a picture of the portfolio's leverage and refinancing calendar.
Adding rental coverage and estimated equity then makes it possible to identify where the debt may be expensive, inefficiently allocated or approaching a point where action is required.
For a landlord accountant, this creates a clean division of responsibility.
The accountant deals with the tax and accounting position.
Willow models the financing.
The client can then make property decisions with both sets of information available.
The Review Should Not Assume More Leverage Is Better
Capital efficiency should not be confused with maximising debt.
Some landlords will deliberately want to reduce gearing.
A client approaching retirement may prioritise predictable cash flow and lower debt over further acquisitions.
Another landlord may be highly acquisitive and regard unused equity as capital that could support expansion.
A third may want to sell half the portfolio over five years and gradually repay borrowing.
The appropriate debt structure is therefore the one that supports the client's actual strategy.
A portfolio review may conclude that leverage should increase on one asset, fall on another and remain unchanged elsewhere.
The purpose is optimisation, not maximum borrowing.
Portfolio Refinancing Can Also Reduce Operational Complexity
Cost is not the only consideration for landlords with larger portfolios.
A client may have mortgages with numerous lenders, payment dates, expiry dates and reporting requirements.
In some cases, consolidating parts of the borrowing can make the portfolio easier to manage.
In others, spreading debt between lenders may preserve flexibility and avoid concentrating refinancing risk.
There is no universal answer.
But once the portfolio reaches a meaningful size, lender diversification, maturity concentration and administrative burden become part of the finance strategy alongside rate and LTV.
The HMRC Figures Are Not Whole-Market Landlord Statistics
The scope of the new publication is important.
HMRC's figures are drawn from Income Tax Self Assessment returns.
They cover unincorporated landlords — principally private individuals and partnerships — that report qualifying property income through ITSA.
They exclude incorporated businesses with property income and individuals whose property income falls below the relevant threshold for inclusion in Self Assessment.
They also do not provide information about tenants or income from buying and selling property.
The data should therefore not be described as covering the entire UK private-rented sector or the whole buy-to-let market.
There is another methodological point when comparing expenses over time. HMRC says it has corrected its treatment of the “services, including wages” expense category because figures reported on SA105 returns had previously been omitted.
That correction affects comparisons with earlier editions of the statistics, although the central finding remains clear: declared expenses have risen substantially and residential finance costs are the largest category by value in the latest data.
Finance Costs Are Now Too Large to Treat the Mortgage as a Standalone Product
The most useful conclusion from HMRC's release is not that every landlord needs to remortgage.
Nor is it that every landlord should restructure their portfolio or change ownership.
It is that financing has become too significant a component of the economics to assess each mortgage in isolation.
When £12.82bn of residential finance costs represent 37% of all expenses declared by unincorporated landlords, the debt structure deserves the same strategic attention as rent, maintenance, management costs and property selection.
For a professional landlord, that means looking beyond the headline mortgage rate.
The relevant questions include how much debt the portfolio needs, which assets should carry it, how refinancing dates interact, where equity is concentrated and whether the financing still supports the client's intended direction.
For some landlords, the answer will simply be to retain the existing structure.
For others, the portfolio may be carrying expensive debt in the wrong places while substantial equity sits unused elsewhere.
HMRC's new figures provide a strong reason to find out which applies.
Is Your Portfolio Debt Still Working as Hard as the Property?
HMRC's latest figures show residential finance costs are now the largest declared expense for unincorporated landlords. For a professional landlord, that makes the structure of the debt a portfolio-level decision rather than a series of isolated mortgage renewals.
Willow Private Finance can review property values, rents, mortgage balances, LTVs, interest costs, product maturities and available equity across the portfolio to identify where the existing borrowing may no longer be efficient.
Where tax or ownership changes are being considered, we can work alongside the client's accountant and legal advisers, modelling the finance only after the appropriate ownership structure has been established.
Explore Portfolio & Buy-to-Let Finance →Frequently Asked Questions
HMRC's latest statistics demonstrate the scale of finance costs across unincorporated property businesses, but an individual landlord's optimum debt structure depends on the portfolio and their objectives.
How much property income did unincorporated landlords declare in 2024/25?
HMRC reports that 2.88 million unincorporated landlords declared £58.99 billion of UK property income in 2024/25. This was broadly unchanged from £59 billion in 2023/24.
What is the largest expense reported by unincorporated landlords?
Residential finance costs were the largest expense category by amount in HMRC's 2024/25 data, at £12.82 billion. This represented 37% of all allowable property expenses declared by unincorporated landlords.
Should a portfolio landlord refinance every property to the cheapest mortgage?
Not necessarily. A portfolio review can consider interest cost alongside LTV, rental coverage, equity, refinance dates, borrowing requirements and the role of each property. The most efficient portfolio debt structure may not simply be the cheapest individual mortgage on every asset.
Do HMRC's landlord statistics include limited companies?
No. HMRC's publication is based on Income Tax Self Assessment returns and covers unincorporated landlords, principally individuals and partnerships. Incorporated property businesses do not file ITSA returns and are not included in these figures.
Should a landlord move personally owned properties into a limited company to reduce finance or tax costs?
That cannot be determined from these statistics and should not be assumed. Changing property ownership can have significant tax, legal, financing and transaction-cost consequences. Landlords should obtain appropriate tax and legal advice before changing ownership structures, after which the corresponding finance options can be assessed.