The latest data from HMRC indicates that landlord rental income has stabilised at £59 billion, following a period of growth since 2020. This plateau comes after a notable increase in property income and the number of landlords reporting earnings, reflecting a significant shift in the UK mortgage market.
What does the plateau in rental income mean?
After experiencing a 26% increase from 2020 to 2021, the total income from UK property has now plateaued. This stability follows a peak in the number of unincorporated landlords, which rose from 2.81 million in 2020-21 to 2.88 million in 2024-25. The average income for these landlords reached £20,500 in 2024-25, marking a £3,900 increase since 2020-21. This suggests that while the growth trend has levelled off, landlords are still benefiting from higher average earnings.
Who are the primary earners in the rental market?
Of the 2.88 million unincorporated landlords, a significant majority—2.85 million—are individuals who collectively declared £49.81 billion in earnings. Notably, 1.3 million landlords reported rental earnings of £10,000 or less, highlighting that a substantial portion of the market consists of smaller landlords. Additionally, 17% of these landlords are based in London, contributing to 28% of all declared rental income, underscoring the regional disparities in rental income across the UK.
What this means for landlords in the mortgage market
For landlords, the plateau in rental income indicates a potential shift in the market dynamics, as growth may not continue at the previous pace. Investors should note that while average earnings have increased, the number of landlords reporting income is also rising, which could lead to increased competition. Furthermore, the decline in income from furnished holiday lettings—from £2.47 billion to £2.46 billion—suggests that this segment may be facing challenges, impacting those who rely on short-term rentals.
Frequently asked questions
How has the rental income market changed recently?
Rental income has plateaued at £59 billion after a period of growth, indicating a stabilisation in earnings for landlords.
What should landlords consider moving forward?
Landlords should be aware of the increased competition in the market and consider adjusting their strategies, especially in light of declining income from holiday lettings.