UK Landlord Rental Income Rises 23% as Buy-to-Let Fundamentals Strengthen

HM Revenue and Customs recorded £58.99 billion of UK property income declared by 2.88 million unincorporated landlords in 2024/25. Average declared property income reached £20,500 per landlord, the highest level recorded during the five-year reporting period.

The HMRC statistics measure a different landlord population and cover an earlier period than the Rushbrook analysis. They cannot be compared directly, but they confirm the same underlying direction. Average property income declared by unincorporated landlords increased by £3,900, or 24%, between 2020/21 and 2024/25.

The short-term portfolio analysis and the official longer-term data therefore both show rental income rising substantially. This improvement is particularly significant because it has occurred during a period of increased taxation, regulation and operating costs for landlords.

UK Finance reported that the average gross buy-to-let yield reached 7.21% in the first quarter of 2026, up from 6.93% a year earlier.

The average interest rate on new buy-to-let loans also fell to 4.71%, 29 basis points lower than a year earlier. Landlords are therefore generating more rental income relative to property values while the average cost of new borrowing moves in the opposite direction.

The effect can be seen in interest cover, which increased from 204% to 221%. A figure of 221% means the measured rental income provided £2.21 for every £1 of mortgage interest, compared with £2.04 a year earlier.

Interest cover is not the landlord’s net return. It does not deduct management, maintenance, insurance, taxation or other ownership costs. However, the increase is unequivocally positive because rental income is covering mortgage interest by a substantially wider margin.

The average portfolio analysed generated an additional £16,476 in annual gross rental income. Borrowing also increased by 14.6%, from £642,000 to £736,000, but rental income rose considerably faster.

The final benefit will depend on each landlord’s mortgage, management, maintenance, insurance, taxation and other ownership costs. However, the scale of the income increase provides greater capacity to cover those costs while improving cash flow and the portfolio’s potential net return.

An average portfolio of 7.3 properties, worth approximately £1.7 million and generating almost £90,000 in annual rent, represents a substantial property business.

Investors are responding accordingly. Purchase price, mortgage terms, achievable rent, operating expenditure, and taxation are being assessed together, while professional management is becoming increasingly important for occupancy, rental performance, and cost control.

The latest figures do not depend on a return to the ultra-low interest rates of the previous decade. They show buy-to-let adapting successfully to present conditions, with rental income and yields rising while average rates on new borrowing ease.

National averages demonstrate the direction of the wider market. The performance of an individual investment will still be determined by the property purchased and the price paid.

Values, achievable rents, tenant demand and ownership costs vary considerably between locations and property types. The strongest opportunities are generally found where prices remain supported by completed sales and local incomes, while achievable rent produces an attractive return from the outset.

This is why SmartLandlord focuses on affordable regional markets with headroom for growth and mainstream properties supported by broad tenant and owner-occupier demand.

The objective is not to pursue the highest advertised yield. It is to select the right asset at the correct price, combining sustainable income with mainstream mortgageability, resale liquidity and long-term growth potential.

BTL Insider Average landlord portfolio generating almost £90,000
HM Revenue and Customs Property rental income statistics 2026
UK Finance Buy-to-Let Lending Q1 2026
SmartLandlord Buy-to-Let Yields Reach 7.21%