A new HMRC-commissioned study has revealed that the vast majority of UK landlords remain small-scale, individual owners, with modest profits and growing concerns around tax complexity.

Conducted by Ipsos, the nationwide research draws on survey data and in-depth interviews with landlords to understand their investment behaviours, property ownership structures and experience managing their tax affairs.

The findings paint a picture of a sector dominated by individuals: 93% of landlords own property in their own name, with only 7% operating through a limited company and 5% via partnerships.

More than half own just one rental property.

More than half (55%) own just one rental property, and the average portfolio comprises three units.

While 60% entered the market with investment intentions, 40% inherited property or initially bought it to live in.

Nonetheless, most cited the long-term security of bricks and mortar – and expectations of capital appreciation – as the principal reasons for remaining landlords.

MODEST PROFITS

Despite buoyant rents, profitability remains modest. Nearly two-thirds (63%) of landlords earn less than £20,000 in annual gross rental income, and 52% report less than £10,000 in annual profit. Company landlords were more likely to earn over £50,000, but they remain a minority.

Tax administration is a growing pressure point. Almost half (49%) now employ accountants to manage their property-related tax affairs, with many citing a lack of expertise and the complexity of ever-changing rules. A further 43% handle tax themselves, but over a third report difficulty preparing returns.

The research also found that 63% of landlords use letting or property management agents to run their rental operations, indicating widespread dependence on third parties within the sector.

GETTING OUT

Looking ahead, 24% of landlords plan to reduce their property holdings in the next year, rising to 33% over five years. Just over half (53%) said they had no intention of selling, while 73% plan to maintain current portfolio levels.

The findings arrive ahead of the phased rollout of Making Tax Digital for landlords from 2026, and come amid mounting scrutiny over housing supply, affordability, and regulatory oversight.