The latest data from HMRC indicates that landlord rental income in the UK has plateaued at £59 billion, following a significant rise since 2020. This shift is important for stakeholders in the mortgage market, as it signals a potential change in the dynamics of rental income and property investment.
What Do the Latest Figures Show?
According to HMRC, rental income has not increased from the previous year, despite a notable growth trend from 2020 to 2021, when total income surged by 26%, or £12.3 billion. This growth was driven by an increase in average property income and the number of individuals reporting property income, which rose from 2.81 million in 2020-21 to 2.88 million in 2024-25.
Who Are the Key Players in This Market?
Among the 2.88 million unincorporated landlords, the average property income reported was £20,500 in 2024-25, marking a 24% increase since 2020-21. Notably, around 1.3 million landlords earned £10,000 or less, representing 45% of those declaring income. The concentration of income is significant, with 17% of unincorporated landlords based in London, contributing to 28% of all declared rental income.
What This Means for the Mortgage Market
The plateau in rental income could signal a shift in the investment market for landlords and property investors. With income growth stalling, landlords may need to reassess their strategies, especially those in regions like the North East, which accounted for only 2% of total property income. Additionally, the decline in income from furnished holiday lettings—from £2.47 billion in 2023-24 to £2.46 billion in 2024-25—highlights the need for diversification in property investments. This situation may also influence current mortgage rates and lending criteria.
Frequently Asked Questions
How does the plateau in rental income affect mortgage rates?
The stagnation in rental income may influence lenders’ perceptions of risk, potentially affecting mortgage rates and availability for landlords.
What should landlords consider moving forward?
Landlords should evaluate their property portfolios and consider diversifying income sources, especially in light of the declining income from holiday lettings.