Recent figures from HM Revenue and Customs, alongside a detailed analysis by property experts at Savills, have revealed that earnings and profits for landlords in the UK remain remarkably low.
The most up-to-date data from the 2022–2023 tax year shows that private individual landlords collectively earned over £50.2 billion in revenue. However, their overall profit stood at just £25.6 billion — highlighting the financial pressures many landlords are under.
According to Savills, the average gross income for a private landlord during that period was £17,665. After subtracting key expenses such as finance costs — which averaged £2,799 — the typical profit landed at just £9,021.
The consultancy further notes that more than half of all private landlords (51%) reported a gross income of under £10,000. For these landlords, the future is becoming increasingly limited to two main options: either hold onto their properties or exit the market entirely. With rising costs and tighter margins, very few are confident enough to expand their portfolios under the current conditions.
Interestingly, Savills highlights that fewer than 5% of all private landlords — regardless of how many properties they own — report earning more than £50,000 in gross income.
At this higher end of the earnings scale, landlords typically have a broader set of choices. Some may even look into incorporating their portfolio into a company structure to help manage their tax obligations more effectively or streamline operations.
Savills believes a major shift is already taking place within the landlord sector. Many are actively re-evaluating and reorganising how they manage and structure their portfolios in response to economic changes, tax reforms, and shifting tenant demand.
Supporting this, industry data shows a notable increase in the average portfolio size among buy-to-let investors who use mortgages. Back in the year ending April 2019, the typical landlord had around 3.5 properties.
Fast forward to the year ending April 2025, and that average has grown to five properties per landlord. This suggests that those who remain active in the market are scaling up their holdings — possibly in search of economies of scale or better returns.
In tandem with this increase in portfolio size, landlords have also been targeting stronger yields. The average gross rental yield of properties bought by landlords has increased from 6.0% in 2019 to 7.0% in 2025.
This suggests that while many smaller landlords are being squeezed out, more established investors may be taking advantage of the changing landscape by consolidating their portfolios and focusing on higher-yielding opportunities.
Overall, the data paints a picture of a polarising market. While many landlords are struggling with modest earnings and facing difficult decisions, a smaller group appears to be adapting and even thriving by restructuring and growing their portfolios in a more strategic way.
The question going forward is whether the sector will continue to see this divide deepen, and how long smaller landlords can afford to hold on in such a challenging environment.
Measuring the full size and financial value of the private rental sector is a challenge, especially since certain corporate structures aren’t reflected in HMRC’s published data.
However, estimates for the 2022–2023 tax year indicate that around 2.84 million individuals reported income from property when filing their taxes. It’s also believed that limited companies and other corporate landlords now make up approximately 8% of all residential property investors.
According to further analysis, a significant amount of investment wealth is tied up in the rental market — roughly equivalent to three-quarters of the entire value of the FTSE 100 share index. The research also points out that the private rented sector consists of around 5.57 million homes, with a total estimated value of £1.58 trillion.
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