A major new HMRC-commissioned study into the UK’s private rental sector has revealed that the majority of landlords continue to operate as individual owners with modest incomes – and that nearly half rely on accountants to navigate an increasingly complex tax landscape.
The research, carried out by Ipsos, surveyed landlords across the UK through a mix of online, telephone and in-depth interviews.
The findings provide a detailed snapshot of the sector’s structure, motivations, and challenges – with significant implications for lenders, brokers, and policymakers.
According to the survey, 93% of landlords own property as individuals, compared to just 7% through a limited company and 5% via partnerships.
SMALLER PORTFOLIOS
Most own unfurnished residential property (72%) and tend to hold small portfolios – more than half (55%) own only a single rental property. The average portfolio size is just three.
Despite rising rents and growing tenant demand, rental income remains relatively modest for most. Nearly two-thirds (63%) of landlords earn less than £20,000 annually in gross rental income, and 52% make less than £10,000 in annual profit. Only a small cohort – mainly company landlords – report earnings over £50,000.
CAPITAL EXPECTATIONS
While 60% of landlords entered the market for investment purposes, a substantial 40% either inherited or previously lived in the property.
Yet across all landlord types, property is still seen as a secure, physical asset offering long-term value appreciation – a key reason many are holding on, even as costs rise.
Still, around a quarter (24%) plan to reduce their holdings in the next year – rising to 33% over five years – citing rising tax burdens, regulation and affordability challenges. Just 19% rely on property income as their primary income source; for the majority, it remains supplementary.
TAX COMPLEXITY
Nearly half of landlords (49%) now use accountants to manage their property tax affairs, while 43% still self-manage. A significant proportion of self-filers report difficulties, with 40% citing unclear rules and 19% pointing to a lack of tax knowledge.
Despite this, most landlords found tax filing or preparation relatively easy – 62% among self-filers and 68% for those outsourcing.
However, changing tax rules and the administrative burden were frequently raised in qualitative interviews as barriers to compliance.
AGENTS AND BROKERS
Letting agents, property managers and other third parties continue to play a major role in the rental value chain.
Some 63% of landlords use an intermediary to manage their rental activities – a figure with direct relevance to mortgage brokers who may need to liaise with agents during buy-to-let application processes.
