The true cost of a being a landlord: The average B2L investment makes a return of just £2k a year

Leading letting platform Howsy has revealed how the profitability of the buy-to-let sector is being squeezed due to the hidden costs of being a landlord, coupled with the financial penalties handed down from the Government via changes to stamp duty tax.

In recent times, the buy-to-let market has been considered a cash cow for those with the financial means to operate within it, leading to a number of Government changes to dent this profitability through initiatives such as an increase in stamp duty tax.

The same situation is happening worldwide. For instance, in Canada, real estate investments in bc have similar characteristics, and landlords face the same challenges.

Despite this, landlords are still considered to be raking it in, but Howsy has found that the average landlord is left with just £2,000 from an annual return of £13,000 once the hidden costs of being a landlord are paid for.

The research shows that the initial start-up costs of Stamp Duty Tax (£6,663) and agency fees to find a tenant (£811) cost the average landlord £7,475 and that’s before the ongoing costs are considered.

According to a recent survey, the average landlord experiences 23.75 days of void periods a year during a tenancy, that’s an average of £535 a year.

What’s more, 73% of landlords buy with a mortgage and each and every year will see £6,921 paid out in interest as a result. Couple these costs with an additional £1,622 in agency management fees, an average annual maintenance and repair bill of £2,077 and you’re talking £11,147 per year.

In a worst-case scenario, UK landlords may also find themselves forced to stump up for additional unforeseen costs, such as the legal process to evict a tenant. While this doesn’t happen to everyone, there is a one in 500 chance that you will have to pay for bailiffs to evict a tenant from your property.

What’s left?

Based on an average annual rental income of £8,112 divided by the average B2L property cost of £183,278, the average yield available is 4.4% – that’s an annual sum of £8,119.

Over the last decade, the capital appreciation of bricks and mortar has also averaged an increase of 2.85% a year, £5,223 in monetary terms. That means B2L landlords are seeing a return of £13,343 on their investment.

However, leaving start-up costs and unforeseen events out of the equation, once the average UK landlord has paid the ongoing costs associated with a buy-to-let property each year, they’re left with a profit of just £2,140.

Founder and CEO of Howsy, Calum Brannan, commented:

“Investing in an area with higher yield is one way to increase profit but you can also squeeze every last penny out of your property by shopping around on things like mortgage rates and which agent to use.

Today, the sector is ripe with alternative platforms and so you don’t have to be at the mercy of the traditional letting agent and the high fees they charge.

The new age of letting platform not only costs less where fees are concerned but many platforms, like Howsy, are now offering comprehensive packages designed with security and peace of mind as the motivation, not profit. These packages provide the traditional service aspects with the addition of guaranteed rent and also cover the cost of repairs and maintenance for one small monthly fee.

All of this can contribute to lower void periods, no rental arrears and an all-round happier experience for tenant and landlord which can be as valuable as the additional income.”

Howsy Protect is Howsy’s most comprehensive property management package and is available to Howsy landlords for £90 per month (£115 in London). It includes a free tenant-find service guaranteed rent, appliance cover, home & emergency cover, a handyman service, Rightmove premium listing as standard and a dedicated account manager along with a whole other host of benefits. This one-off monthly management fee could save the average UK landlords nearly £10,000 per year.

Cost Headings
Cost Amount (£)
One-Offs Costs:
£7,474.54
Ongoing Costs:
£11,147
Average Annual B2L Return:
£13,287
Average Annual B2L Return – Ongoing Costs
£2,140

Costs Explained…

Cost Headings
Cost Amount (£)
Notes/Sources
One-Offs Costs:
SDLT
£1,165.00
SDLT second home penalty
£5,498.34
Agency fees (tenant find)
£811.20
Total
£7,474.54
Ongoing Costs:
Void periods
£527
Mortgage Interest
£6,920.73
Agency fees (management)
£1,622.40
Maintenance & Repairs
£2,077.00
Average cost according to Pennington
Total
£11,147
Positives:
Basis:
Avg annual rent
£8,112
Avg B2L mortgage amount
£132,075
Avg house price
£183,278
Avg LTV
72.06%
Avg equity
£51,203
Return:
Annual Yield %
4.4%
Average annual rent divided by average B2L house price
Annual Yield £
£8,064
Average B2L house price multiplied by 4.4%
Capital appreciation per annum %
2.9%
Based on average property price change per annum over the last decade
Capital appreciation per annum £
£5,223
Average Annual Return
£13,287
Ongoing Costs
£11,147
Final Annual Return
£2,140

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Breaking News

UK monthly property transactions for May 2025

Headline statistics from the latest transactions data include: the provisional seasonally adjusted estimate of the number of UK residential transactions in May 2025 is 81,470, 12% lower than May 2024 and 25% higher than April 2025 the provisional non-seasonally adjusted estimate of the number of UK residential transactions in May 2025 is 80,530, 13% lower than May 2024 and…
Read More
Breaking News

Construction Skills Mission Board (CSMB) shows the Government has a plan

The Construction Skills Mission Board (CSMB) held its first board meeting today (26 June 2025), where it set out a roadmap for recruiting 100,000 more construction workers a year by the end of Parliament. Richard Beresford, Chief Executive of the National Federation of Builders (NFB), said: “The Construction Skills Mission Board (CSMB) is a recognition…
Read More
Paint Stripper Tools
Estate Agent Talk

5 Strategies to Optimise Your Warehouse for Real Estate

The term fixer-upper can mean many things, from ‘slap some paint on the walls and it looks brand new’ to ‘will this building collapse if we open the front door?’ Indeed, in the dicey world of commercial property acquisition, each warehouse you buy will probably fall into both camps. Thinking about the viability of warehouses…
Read More
Breaking News

HMOs sell for up to 50% above market average

New research from Excellion Capital, the boutique debt advisory and investment firm, reveals that HMOs sell for as much as 50% above the average house price, further increasing their investment potential after it was revealed that HMOs also create rental yields of up to 12.5%. After previous research from Excellion Capital recently showed that the…
Read More
Breaking News

UK buyers struggle while 50,000 homes sit empty

As the UK housing crisis deepens, new analysis by Open Property Group exposes a worrying surge in so-called “zombie homes”- properties that sit unoccupied and deteriorating while millions struggle to access affordable housing. Key insights: 50,000+ long-term vacant homes in England alone 23,000+ of these have been empty for more than two years Estimated £13.6…
Read More
Breaking News

Breaking Property News 26/06/25

Daily bite-sized proptech and property news in partnership with Proptech-X.   The UK is Europe’s second most distressed market despite headline GDP growth Retail and Consumers Goods has emerged as the most distressed sector in Europe, with distress levels now the highest since the global financial crisis, according to the latest Weil European Distress Index (WEDI). The…
Read More