Despite a challenging few years for the buy-to-let market, characterised by tax and regulatory changes, investment in the sector has continued to outperform most major asset classes, as Britain’s rented sector continues to expand, with a sixth of the population now living in accommodation rented from private landlords.
Total property income declared by unincorporated landlords in 2021-22 was £48.8bn, up from £46.3bn the previous year, new figures show.
According to HMRC, 2.79m landlords filed self assessment tax returns, with the overwhelming majority operating as individual buy-to-let landlords. There were also 300,000 partnerships with rental properties, earning £6.17bn.
The total income from UK property increased by 10% in the five years from 2017 to 2022, driven by an increase in average income to £16,700 and the number of landlords was up by 100,000.
The largest category of expense was finance costs, with £6.85bn being claimed in 2021-22. This accounted for 29% of all expenses claimed against UK property income by unincorporated landlords
The most common expenses claimed were rent, rates and insurance, and repairs and maintenance, with 67% of unincorporated landlords declaring expenses of these types with total claims up 6%.
While the majority of landlords buy property directly, a growing number of investors are using limited company structure to reduce their tax bills.
