Running costs continue to rise in the private rental sector, with maintenance and repairs now consuming almost 40% of landlords’ total spend in some cases, according to research from Pegasus Insight.
The Q3 2025 Landlord Trends Report shows that property maintenance and repairs remain the largest expense faced by landlords, accounting for between 31% and 39% of total portfolio expenditure, depending on the property type.
Overall, landlords now spend between 25% and 45% of their gross rental income on operating costs, including maintenance, service, insurance, utilities, professional fees and regulatory compliance.
The average total annual spend is £19,604 for non-residential multi-occupancy (HMO) landlords, rising to £35,720 for those operating HMOs.
The average buy-to-let (BTL) portfolio generates a gross income of £79,000 per year.
The main difference in the distribution of expenses between HMO and non-HMO landlords is the amount spent on utility bills, which at 16% is more than four times higher for HMO landlords, who typically include these in the rent they charge.
The findings come despite strong rental yields reported elsewhere in the Q3 survey, and underline the increasing cost pressures landlords face as they try to maintain standards and comply with a growing regulatory framework.
Commenting on the findings, Pegasus Insight founder and director Mark Long said: “Maintenance and repairs have always been one of the key costs for landlords, but what we are now seeing is a step change in scale. Even with returns at their highest point in recent years, a growing proportion of rental income is being absorbed by day-to-day running costs and compliance requirements.”
“For many landlords, especially those with older stocks or more complex portfolios, the challenge is no longer generating revenue but protecting margins in the face of rising costs.”
Long added: “Our wider research shows that landlords are investing more than ever to keep properties safe, compliant and habitable, yet maintenance remains a pressure point in the rental relationship.”
“Rising labor costs, supply chain issues and higher tenant expectations make delivering timely repairs increasingly challenging.”
“The risk is that continued increases in maintenance costs will ultimately feed through to higher rents as landlords look for ways to finance the ongoing investment needed to keep properties in good condition.”