Data published by HM Revenue and Customs and analyses by property consultancy Savills show landlord income and profits are staggeringly low.
In 2022–23 – the latest data available – private individual landlords generated a total profit of over £25.6 billion on a turnover of £50.2 billion.
The Savills analysis says: “With the average private individual landlord reporting a gross income of £17,665, this equates to an average profit of £9,021, having deducted finance costs of £2,799, among other elements.”
The agency continues: “51% of private landlords report gross income of less than £10,000. For those operating in this bracket, the decision about what to do next is mostly binary: hold or, increasingly, sell. Only the bravest are likely to expand in the current environment.”
Savills says fewer than one in 20 private landlords – of any portfolio size – report a gross income of over £50,000.
The agency notes that at this end of the scale, landlords have more options – possibly including incorporation as part of a portfolio restructuring.
And that restructuring is underway of a significant scale, Savills suggests.
It says that industry data shows that in the year to April 2019, the average size of portfolio for a mortgaged buy to let investor was 3.5 properties, whereas in the year to April 2025, this had risen to 5.0, with the gross yield they have bought into rising from 6.0% to 7.0%.
Overall, the size and wealth of the private rental sector is difficult to quantify as some company structures are not included HMRC figures.
But the agency estimates that in 2022–23, there were 2.84m individuals declaring a property income for tax purposes. And it suggests that corporate landlords could account for 8% of all current residential investors.
It goes on to say: “Correspondingly, there is a lot of investment wealth tied up in the sector, reflecting three quarters of the value of all shares on the FTSE 100. Our analysis suggests that there are 5.57m homes in the private rented sector, worth an estimated £1.58 trillion in total.”
This article is taken from Landlord Today