An online lettings platform claims that the average UK landlord has seen an IMPROVEMENT in net returns, not a fall, when accounting for ongoing costs.
Dwelly says it’s analysed key costs and income associated with being a landlord, including acquisition costs, operating expenses, and returns from both rental yield and capital appreciation. The analysis compares this year with last.
It claims the average start-up cost to become a landlord in 2025 has risen to £16,824, an increase of 63.3% compared to £10,302 in 2024. This rise has been driven mainly by a sharp 76.9% increase in Stamp Duty Land Tax (SDLT), now averaging £14,926 due to higher rates on second properties.
Other start-up expenses, such as agency tenant-find fees and digital tax compliance, have remained broadly stable.
Perhaps surprisingly, it claims the ongoing annual costs associated with a buy-to-let investment have decreased by 24.6% year-on-year, falling from £15,694 to £11,829. The most notable saving has come from reduced mortgage interest costs, down 39.6% from £10,210 to £6,162 due to falling variable rates. Maintenance and repairs have also seen a modest drop of 5.1%, while void period losses and landlord insurance costs have both increased.
Meanwhile it suggests that the average rental income has edged up by 3.6% over the past year, now sitting at £15,684 annually. Despite this, the total income from buy-to-let – including both rental income and capital appreciation – has dipped by 6.6%, falling from £29,901 to £27,923. This drop is largely due to slower house price growth, with average capital appreciation falling from £14,757 to £12,239 per year.
However, when deducting the ongoing costs of a buy-to-let investment from the income generated, the average landlord is left with £16,093 – up 13.3% from £14,206 the previous year. This improvement in net return is a result of lower running costs, even as top-line income has declined.
A spokesperson for Dwelly says: “Today’s rental landscape is more complex, with higher up front costs and slower capital growth. But our research shows landlords are adapting well, supported by falling mortgage costs and a strong underlying rental market. What matters most is the return, and it’s going up.”
This article is taken from Landlord Today