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Should you furnish your buy-to-let?


Landlords who don’t furnish their properties may be missing out on a large amount of rent in some citites, new research has suggested.

The study by CIA Landlord Insurance revealed that furnished city rentals can command up to 50 per cent higher rents than unfurnished properties.

The research looked at the average rents of furnished and unfurnished properties across the UK to reveal where landlords can maximise their profits. 

Target market: Bristol is the most profitable city for landlords with furnished properties. The average monthly rent is £2,038 compared to £1,355 when left unfurnished

 Target market: Bristol is the most profitable city for landlords with furnished properties. The average monthly rent is £2,038 compared to £1,355 when left unfurnished

A furnished property will typically include all the white goods such as a cooker, fridge, freezer and washing machine as well as sofas, dining table, chairs, wardrobes, chest of drawers and beds as an absolute minimum.

An unfurnished property may include white goods but will usually not include any furniture, with the tenant expected to kit out the house.

Outside of London, landlords in Bristol will typically notice a 50 per cent price difference between furnished and unfurnished properties, according to the research.

A furnished property in Bristol will on average fetch £2,038 a month compared to the £1,355 an unfurnished property will demand – that’s £683 more.

Landlords with properties in Brighton and Liverpool can also make much more from furnished properties at £462 and £408 extra per month respectively.

However, the analysis also found that not all towns and cities offer better returns for furnished properties.

The least profitable location for landlords with furnished properties was found to be Northampton.

The average furnished property in Northampton costs £713 compared to £987 when left unfurnished, equating to £274 less per month.

We excluded figures for London as, with the vast majority of properties offered furnished, these were not representative.  

Should you furnish a rental property?

In the UK, google searches for ‘furnished rental’ have risen by 19 per cent in the last twelve months, according to CIA Landlord Insurance.

There has also been a decline in people looking for unfurnished rental properties, with internet searches dropping by 202 per cent in the same time.

These figures are thought to have been swayed by the return of workers and students to cities post-pandemic, many of whom often need places to stay on a short-term basis.

Many landlords furnish their property in order to make it more attractive to renters and consequently demand a higher price. 

Whether it will make sense to furnish a rental property will depend on the local lettings market and your target renter.

In terms of location, city center flats tend to be furnished, whilst more rural properties will typically be left unfurnished.

For landlords targeting young professionals or students, for example, furnished properties tend to do better.

The stress and cost of having to purchase, move and re-sell furniture will be unappealing to these types of renters, particularly if they can’t necessarily commit to staying for more than a year. 

London has the highest proportion of furnished properties in the UK with over 10,000 furnished rentals listed on Zoopla this month.

The UK city with the least amount of furnished rentals was found to be Swindon, with just 28 furnished properties listed.

Home comforts: A furnished property will typically include all the white goods as well as sofas, a dining table, chairs, wardrobes, chests of drawers and beds as a minimum

Home comforts: A furnished property will typically include all the white goods as well as sofas, a dining table, chairs, wardrobes, chests of drawers and beds as a minimum

Wolverhampton also has a smaller amount of furnished properties available, with just 32 furnished properties listed in comparison to 88 unfurnished.

Looking at the competition is one way for landlords to see what renters are likely looking for. 

However, a local letting agent may be able to give an even better sense of whether to furnish or not.

Marc von Grundherr, director of Benham & Reeves estate agents says: ‘Furnishing a rental property is a must-do in markets such as London where the vast majority of tenants will be working professionals.

‘Those looking to rent flats, particularly professional tenants or corporate entities looking to house employees, will always want to see the property fully furnished before they agree to move ahead.

‘It’s also a smart move in areas where the propensity for short lets and demand due to tourism is higher, or where the predominant industry is seasonal or requires tenants to move frequently.

‘Furnished rental properties are also extremely popular with both foreign tenants and investors alike, as they allow them to invest at arm’s reach and have everything taken care of without having to jump on a plane.

‘Even the average tenant will want to move quickly on a furnished property as the time and money saved in not having to bring or buy their own furniture is huge.’

When should landlords not furnish a home?  

If your target market isn’t either city workers, young professionals or students it may be more beneficial to leave the property empty.

A tenant that furnishes the property has to invest so much in making it their home, they will arguably be more inclined to remain for longer.

Furthermore, families or older renters may already have furniture they wish to bring with them and will be looking specifically for unfurnished homes.

Market appeal: Some renters may prefer furnishing the property themselves.

Market appeal: Some renters may prefer furnishing the property themselves.

There is also the matter of whether furnishing a property makes financial sense for the landlord, as it will also bring with it extra liabilities and costs.

This includes the cost of furnishing the property to begin with, and the costs of replacing damaged furniture in the future.

Von Grundherr says: ‘Cities that are heavily reliant on students within the rental market aren’t always the best option for those looking to furnish.

‘The damages and losses, along with the cleaning bill, can often mean furnishing a property is more trouble than it’s worth, even if you can recoup this cost at the end of the tenancy.’

The upfront cost will depend on the quantity and quality of the furniture a landlord opts for.

Von Grundherr adds: ‘You must provide the essentials such as an oven, bed and sofa but this isn’t what lets properties.

‘It’s the finishing touches and accessories that will secure you a tenant – throws and cushions on the sofa for example.

‘At the same time, you don’t want to go overboard, you need to find the balance. For example, always avoid furnishing a property with consumer electricals, items such as TVs, hair dryers or an Alexa.’

Should you use a furnishing company?

There are a host of companies that offer professional furnishing services that can help to save you time, effort and – in some cases – money.

Furniture packages will typically range between £2,000 and £6000 depending on the size of the property and the quality of furniture, although it is possible to find both cheaper and more expensive deals.

Some landlords may prefer to source the furniture themselves, so they have a sense of control over the costs and design.

Vested interest: Tenants who bring their own furniture may be more likely to remain for longer

Vested interest: Tenants who bring their own furniture may be more likely to remain for longer

How successful the end result will be also depends on their own sense of taste. 

This is why Von Grundherr believes that when it comes to furnishing, landlords are better off using a professional company than going it alone.

This is especially true for those renting out higher-end properties and family homes, where the tenants may be more discerning.  

‘Most people think they have a good eye for style but the reality is they don’t,’ he says. ‘When furnishing a property you want to keep it simple, stylish and as appealing as possible to multiple tenants.

‘A professional company will be able to do this far better and it saves you the considerable headache of choosing colour schemes and so on.

‘It can also save you a considerable amount of time, as furnishing companies often hold a great deal of stock and so are able to furnish a property as soon as the decision is made.

‘Those going it alone will find that they may have to wait months on end for their furniture to arrive, which is not only frustrating, but it lengthens their void period and loss of rental income.’

Opting for unfurnished could cut council tax 

One final factor that might sway landlords to go unfurnished is the potential for a council tax discount. 

You’ll usually have to pay council tax when your rental property is empty, but your local council may offer discounts to unfurnished properties.

If unfurnished, in some cases it is possible to receive up to a 100 per cent discount, while furnished properties may receive up to a 50 per cent discount on council tax if unoccupied.

Whether you are eligible will depend on your local council. If available, it may also only be available for a period of time – for example, up to one month or six weeks.

It’s also worth factoring in that you’ll need to include the furniture as part of your landlord insurance, if you have it.

Although there is no legal requirement to have landlord insurance, including furniture as part of the policy will likely add to the annual premium.

Best mortgage rates and how to find them

Finding a mortgage can seem confusing due to the huge range of deals on offer.

This is Money has partnered with independent fee-free mortgage broker L&C, to help you find the right home loan.

Our mortgage calculator can let you filter deals to see which ones suit your home’s value and level of deposit.

You can also compare different mortgage fixed rate lengths, from two-year fixes, to five-year fixes and even ten-year fixes, with monthly and total costs shown.

Use the tool at the link below to compare the best deals, factoring in both fees and rates. 

> Compare the best mortgage deals available now  

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