Two HMRC-rooted data points landed within days of each other, and read together they tell a sharper story than either does alone: the average landlord’s costs are now rising at twice the rate of their rental income, and tenants are challenging proposed rent rises at nearly four times last year’s rate through the First-tier Tribunal. Away from lettings, conveyancers are putting real numbers behind long-standing unease about Modern Method of Auction sales, and July’s transaction figures give a market picture that depends entirely on which adjustment you read.
Landlord costs are now rising twice as fast as rental income
Unincorporated landlords declared £34.75 billion in allowable expenses against £58.99 billion in rental income for 2024–25, according to Landlord Today’s report on an analysis of HMRC self-assessment data by lettings platform Hello Neighbour. Five years earlier the figures were £22.33 billion against £46.69 billion — expenses have grown 56 per cent over that period against 26 per cent for income, pushing the expense-to-income ratio from 47.8 to 58.9 per cent. On a per-landlord basis, average declared income reached £20,500 in 2024–25 against £13,700 in expenses. The single biggest line is finance costs at £12.82 billion, 37 per cent of all expenses claimed, averaging £11,148 across the 1.15 million landlords who claimed it; repairs and maintenance came next at £6.41 billion across 1.92 million landlords. Hello Neighbour chair Phil Shelley put it plainly: “A sector housing a fifth of the country cannot absorb costs rising at twice the rate of income indefinitely.”
This matches what I see walking round rental stock for condition surveys. Higher-rate mortgage finance and reactive repairs are the two budget lines that actually break a landlord’s numbers, and this data confirms it at scale rather than anecdote. It is not really a story about grasping landlords or aggrieved tenants — it is a story about a margin that has been compressed from both ends for five straight years, and it is the backdrop against which the next story needs to be read.
If you are a landlord, model your finance-cost exposure properly rather than absorbing rate rises silently, and shift as much spend as you can from reactive to planned maintenance — an emergency repair routinely costs two to three times the planned equivalent for the same job.
Rent tribunals have gone from rare to routine
The First-tier Tribunal (Property Chamber) made 166 market rent decisions in July 2026, against a monthly average of just 42 in the twelve months to May and only 44 in July 2025, Landlord Today reports, citing analysis of tribunal data by lettings agency Hamptons. The climb has been sharp since the Renters’ Rights Act’s rent-increase provisions took effect in May: 109 decisions that month, 129 in June, 166 in July. Tenants brought around 60 per cent of July’s cases, and the average decision now takes 80 days. Paul Rooke, a partner at Mayo Wynne Baxter, called it “a clear indication that the Renters’ Rights Act has shifted the balance of power towards tenants,” while Morr & Co’s Kristine Ng noted the tribunal weighs genuine market rent, not whatever cost pressure a landlord happens to be under.
That last point is the sting in the tail of the story above. A tribunal does not care that a landlord’s finance costs have gone up 56 per cent in five years — it asks only whether the proposed rent reflects what comparable local lettings actually achieve. The landlords under the most cost pressure are, almost by definition, the ones most likely to propose an above-market increase to claw some of it back, and they are now the ones most exposed to having it knocked down, with 80 days of uncertainty attached while it happens.
Build your comparables evidence before you serve a Section 13 rent increase notice, not after a tenant refers it — recent local lettings of similar property type, condition and size, not your own cost base. If you cannot point to genuine market comparables, expect the tribunal to be unmoved by a strong justification for why you need the money.
Modern Method of Auction’s fairness questions are catching up with its growth
MMoA sales are up almost 15 per cent year on year, and property auctions as a whole now generate more than four times their proportional share of complaints against a 2 per cent share of total sales, according to Today’s Conveyancer. Unlike a traditional auction, an MMoA “winning bid” buys a non-refundable reservation fee and a window — typically 56 days — to complete, not binding ownership at the fall of the hammer. Rob Hailstone of Bold Legal Group put the structural problem bluntly: “With MMoA, the successful bidder has not necessarily bought the property at all,” only the right to try. Daniel Marsden of Probate Auction went further on motive: the process “borrows our terminology to great effect” while, in his view, “the driver here seems to be fees” — iamproperty disclosed £45.6 million paid in fees across 12,065 sales, an average of £3,779 each, and Alto Auctions guarantees agents a minimum £2,500 per completed sale on top of the standard vendor fee. The Property Ombudsman confirmed confusion around MMoA is a recurring complaint theme and said businesses “have a responsibility to communicate fairly, clearly and transparently.”
I get instructed on MMoA purchases reasonably often, and the pressure Hailstone describes landing on conveyancers lands on surveyors in exactly the same shape: a buyer racing a 56-day countdown wants the survey turned around fast, because every week that passes without exchanging is a week closer to losing a four-figure non-refundable fee for nothing. If the survey turns up something serious, that buyer is not weighing the finding against the price the way a normal purchaser would — they are weighing it against a sunk cost they have already lost either way. That is a genuinely different risk profile to an open-market purchase, and it deserves to be treated as one.
If you are buying through MMoA, instruct your survey the day you reserve, not in week two of the clock, and decide your walk-away threshold before you read the report rather than after — treat the reservation fee as already spent, because financially it is, whether or not you complete.
July’s transaction figures deserve a level head, not a headline
HMRC’s provisional July 2026 data, published 28 August, put seasonally adjusted UK residential transactions at 96,710 — down 2 per cent on June and 1 per cent on July 2025 — while the non-seasonally adjusted figure of 106,620 was 5 per cent up on July 2025. Today’s Conveyancer’s optimistic framing leans on the second number and on commentary from the Guild of Property Professionals’ Iain McKenzie and Fine & Country’s Nicky Stevenson, alongside a separate Zoopla figure showing prospective-buyer searches up 7 per cent.
Both readings of the same release are technically correct, which is exactly why a single month’s HMRC print is a poor basis for calling a turn in the market either way. The seasonally adjusted figure is the one built to strip out exactly the kind of summer dip a raw year-on-year comparison can make look like growth.
If you are using transaction data to time a sale, a purchase or a valuation instruction, look at the rolling multi-month trend rather than one release, and note which adjustment a figure you are quoted actually uses before repeating it to a client.
What I’d actually do
- Landlord facing rising finance or repair costs? Model the exposure properly and shift spend from reactive to planned maintenance rather than folding the whole increase into next year’s rent.
- About to serve a rent increase notice? Assemble genuine local market comparables first — the tribunal weighs market rent, not your cost base, and 80 days of limbo is a long time to be wrong.
- Buying via Modern Method of Auction? Book the survey the day you reserve and set your walk-away threshold before the report lands, treating the reservation fee as already spent.
- Quoting transaction data to a client? Use the rolling trend, not one month’s release, and be clear which adjustment the number uses.
Today’s notes touch landlord finances, tenant disputes and the pressures a tight auction clock puts on due diligence — the practice covers full building surveys across the South East, including instructions bought under tight completion deadlines. Get in touch.
Small print. General commentary, not advice for your specific circumstances — regulations, schemes and deadlines change, and your property is not the average property. Sources linked were accurate when read on 1 September 2026.