Editor's note: This brief was summarised by The Property AI Team from a report by Property118. Read the original article for full details.
Landlord Hourly Earnings Could Fall Below Minimum Wage, Analysis Suggests
A Property118 analysis has examined what landlords actually earn per hour once costs, capital and time are accounted for. On its illustrative figures, the reward for a landlord's work could fall below the National Living Wage.
The analysis begins with a £250,000 property. It cites UK Finance reporting an average gross buy-to-let yield of 7.27% in the second quarter of 2026, which would produce about £18,175 a year in rent. It then cites Pegasus Insight's Landlord Trends research, which found non-HMO landlords reporting running costs equivalent to around 25% of gross rental income — about £4,544 on that rent — leaving £13,631 before tax for an unmortgaged landlord. For HMO landlords, the same research found running costs considerably higher, at around 45% of gross rental income.
The article notes that the landlord also has £250,000 tied up in the property, so part of the income is a return on investment rather than payment for work. It focuses on income rather than capital growth, noting property values may rise or fall.
Adding a mortgage
The analysis then assumes a 60% interest-only mortgage — £150,000 borrowed against £100,000 of the landlord's own capital. It cites UK Finance reporting an average interest rate of 4.82% across new buy-to-let loans in the second quarter of 2026, giving interest of about £7,230 a year. After running costs of £4,544 and mortgage interest of £7,230, £6,401 remains before tax.
The article then applies an illustrative 4% return on the landlord's £100,000 of capital — £4,000 — described as an opportunity cost rather than a cost actually paid, to separate the return on capital from the return on work. That leaves £2,401 as the amount that could reasonably be regarded as the reward for the landlord's work. Without the mortgage, the same calculation leaves £3,631.
Hours worked
Pegasus Insight's October 2026 Landlord Trends research found landlords spending an average of 33 hours a month managing their portfolios. Self-managing landlords reported 51 hours a month, compared with 11 hours for landlords using full management, while those with between one and five properties averaged 18 hours a month. The article stresses these are portfolio figures, not hours per property.
Taking the least flattering version — assuming all 18 hours a month are spent on the one property, or 216 hours a year — the £2,401 divided by 216 hours comes to £11.12 an hour. On these figures, the article states, that is below the National Living Wage of £12.71 an hour for those aged 21 and over from April 2026. It adds that the landlord is also taking business risk.
Source: Property118