In short: HMRC figures published on 28 August 2026 show landlords' declared costs took 58.9p of every pound of rent in 2024-25, up from 47.8p in 2020-21, because expenses rose 56% while rental income rose 26%.
Updated 8 October 2026
The key facts
Costs took 58.9p of every pound of rent declared by unincorporated UK landlords in 2024-25, according to HMRC's Property rental income statistics: 2026, published on 28 August 2026.
Landlords declared £34.75bn of allowable expenses against £58.99bn of rental income. Five years earlier, in 2020-21, the equivalent figures were £22.33bn and £46.69bn, which put costs at 47.8p in the pound.
The figures come from tax returns, not a survey or an index. They record what 2.88 million individual landlords told HMRC they earned and spent.
| Unincorporated landlords, UK | 2020-21 | 2024-25 | Change |
|---|---|---|---|
| Total rental income | £46.69bn | £58.99bn | +26% |
| Total allowable expenses | £22.33bn | £34.75bn | +56% |
| Expenses as a share of income | 47.8% | 58.9% | +11.1 points |
Yes: declared expenses rose 56% between 2020-21 and 2024-25, more than double the 26% rise in rental income over the same five years.
The gap widened again in the latest year. HMRC reports that total expenses rose 11% in 2024-25, while describing total property income as "fairly consistent" with the year before.
Per landlord, average rental income reached £20,500 in 2024-25, the highest in the five-year series, and average declared expenses reached £13,700. Those two averages should not be divided into each other. HMRC calculates income per landlord across all 2.88 million landlords, but expenses per landlord across only the 2.54 million who declared any, so every ratio in this piece uses the sector totals instead.
Landlords claimed £6.41bn for repairs and maintenance in 2024-25, an average of £3,339 for each of the 1.92 million landlords who claimed it.
Repairs are the most commonly declared expense of any category, claimed by 66% of landlords. HMRC does not publish the per-landlord average; we calculated it by dividing the published total by the number of landlords claiming.
Two limits on that figure push in the same direction. HMRC excludes capital improvements from the category by definition, so new kitchens, extensions and most energy efficiency work are not in it. And the data counts only what landlords claimed, so any work done but not put on a return is missing. Our reading is that £3,339 understates what a typical landlord spends on the fabric of a rented home in a year. We set out what that spending delivers for tenants in What have landlords ever done for us?
The repair spend is also some distance above what we see in our own managed portfolio, where repairs average about £1,000 per property a year, as set out in our analysis of landlord economics in 2026. The HMRC figure is per landlord rather than per property, and many landlords own more than one home, so the two numbers are not like for like.
Residential finance costs, mostly mortgage interest, reached £12.82bn in 2024-25, making them the largest single category of landlord expense at 37% of everything declared.
That is almost exactly double the repairs bill. The 1.15 million landlords who claimed finance costs averaged £11,148 each, again our calculation from HMRC's totals.
| Expense category, 2024-25 | Total claimed | Landlords claiming |
|---|---|---|
| Residential finance costs | £12.82bn | 1.15m |
| Repairs and maintenance | £6.41bn | 1.92m |
| Legal, management and professional | £4.16bn | 1.79m |
| Rent, rates and insurance | £3.81bn | 1.91m |
A higher rate taxpayer with the average finance costs of £11,148 is roughly £2,230 a year worse off under Section 24 than if those costs were fully deductible.
Since 6 April 2020, when the restriction finished phasing in, individual landlords cannot deduct residential finance costs when calculating rental profit, under section 272A of the Income Tax (Trading and Other Income) Act 2005. They receive a tax reducer worth 20% of the cost instead.
For a basic rate taxpayer the result is broadly the same as full relief. At the higher rate it is not: the reducer on £11,148 is worth £2,230, where a 40% deduction would have been worth £4,459. At the additional rate of 45% the shortfall on the same costs rises to about £2,787.
Companies sit outside the restriction and deduct finance costs in full against corporation tax. The extra tax therefore follows the legal form in which a property is held, not anything about the property or the household living in it. For how that plays out on your own return, see our landlord tax service.
We have not put a sector-wide figure on the additional tax. HMRC does not publish how many of the 1.15 million landlords claiming finance costs pay at the higher rate, and basic rate landlords are broadly unaffected. The illustration also uses the rates for England, Wales and Northern Ireland; Scottish taxpayers face different bands.
Every private tenancy in England and Wales is due to reach EPC C, or hold a valid exemption, by 1 October 2030, and the reformed Decent Homes Standard will apply to privately rented homes in England from 2035. The government confirmed that Decent Homes timetable in January 2026.
The Department for Energy Security and Net Zero confirmed the EPC deadline in its government response of January 2026, with required spending capped at £10,000 per property. Its own impact assessment puts the average spend at £5,400. The deadline is confirmed policy but not yet law: the response states that the changes are subject to Parliamentary approval. None of that work will show up in the repairs total above, because HMRC treats energy efficiency upgrades as capital improvements. Our guide to the EPC rules for landlords covers the deadline, the cap and the exemptions in full.
Grant support exists but tapers. Under the Warm Homes: Local Grant as Greater Manchester Combined Authority runs it, a landlord's first property can be funded at 100% up to £30,000, with second and subsequent properties funded at 50% up to £15,000. Local schemes vary, so check with your council before you plan around it.
Phil Shelley, Chair of Hello Neighbour, said when the figures were published: "A sector housing a fifth of the country cannot absorb costs rising at twice the rate of income indefinitely. Landlords are being asked to fund upgrades the country wants through a tax system that treats them worse than a company holding the identical building. Policy needs a second setting that helps compliant landlords meet the standards rather than only penalising the minority who do not."
HMRC's figures cover only unincorporated landlords filing Self Assessment returns, so landlords who hold property through a limited company are not in them.
Three further caveats matter, and we would rather set them out than leave a reader to find them. First, HMRC revised its back series in this edition, partly to correct the services expense category, so none of these figures should be compared with the 2025 edition; every comparison here uses the 2026 edition throughout. Second, HMRC notes that estimates can rise between publications as late returns are processed, and the next release is due in summer 2027. Third, Hello Neighbour runs a lower-cost lettings and management platform, so we have a commercial interest in findings about the cost of managing rented property, and you should weigh our reading with that in mind.
What the numbers establish on their own is a cost base that has grown at twice the pace of rent for five years, before the spending needed for EPC C and the Decent Homes Standard has properly begun.
Sources
Government
Legislation
Sector
Hello Neighbour calculations
This article is general information about the tax position in the UK at the time of writing, not tax or financial advice.
Management fees sit inside the £4.16bn landlords spent on legal, management and professional costs last year, and they are the cost line most within your control. Compare letting agent fees.