November 27, 2022
Properties in the United Kingdom can be let either furnished or unfurnished. As with all areas of property investment and being a landlord, there are pros and cons to both options and the route you choose to pursue will depend on the characteristics of your property, how actively you intend to manage the property, and your own investment strategyproperty owners who do opt to let their properties as furnished, it is worth delving into how this can be done in a manner that truly adds value. and preferences.
Furnished vs Unfurnished Rental Properties
Although it may seem obvious, it is important to consider what it means to let a property as furnished or unfurnished, as there can be a significant amount of variation across the spectrum. Firstly, letting an unfurnished property does not mean solely providing the bare bricks and mortar of a building.
Landlords need to provide their properties with the essential requirements as to make them habitable for tenants. This means ensuring that the property has sufficient and appropriate kitchen fixtures, bathroom fixtures, and flooring. Beyond this, property owners can begin to use their discretion.
Many landlords opt to include additional furnishings for their tenants, despite advertising the property as ‘unfurnished’. Perhaps the most common addition to unfurnished properties is the provision of ‘white goods’ which include items such as:
- Dishwashers
- Washing machines
- Dryers
- Fridges
- Freezers
Which Properties Should be Furnished?
Whilst larger family homes may commonly be let without white goods, those properties targeting students, young professionals, or shorter-term lets will almost certainly need to include white goods to appeal to their desired target audience. Many tenants, especially those who tend to reside in properties for shorter periods, are unlikely to have their own white goods and will want to avoid the hassle of having to move such goods from one tenancy to another.
White goods aside, landlords may also choose to include certain softer furnishings in their properties to enhance their desirability to prospective tenants. It is not uncommon for landlords to provide blinds or curtains for their properties. They may also choose to include certain smaller items such as mirrors, or additional bathroom and kitchen fixtures. However, this is all down to the landlord’s preference and does not constitute a furnished accommodation.
Strangely, there is no legal definition of what makes a property, furnished, part-furnished or unfurnished. However, His Majesties Revenue and Customs advocate the following:
“To be classed as furnished, the property must comply with the Stamp Office definition of “furnished”, meaning that the tenant can move into the property without having to take with him any furniture at all. The property should therefore contain as a minimum such items as a sofa, one or more beds, plus a dining table and chairs, a cooker, carpets, curtains, and other white goods in the kitchen. If the property only contains curtains, carpets, and white goods in the kitchen, this would not be classed as a furnished property.”
As a consequence, part-furnished properties may include a non-exhaustive number of the above, meaning that there are insufficient furnishings for the property to be truly considered ‘furnished.’ Typically, furnished accommodation will include most, if not all, of the below:
- Sofas and/or armchairs
- TV stand or wall mount
- Dining table and chairs
- Storage cupboards
- One or more wardrobes
- Chest of drawers
- One or more beds
- Bedside units
Why Would You Let A Furnished Property
Letting a furnished property often requires a higher capital outlay and increased maintenance costs. With this in mind, you may question why a property owner would let a property as furnished.
The key reason a property owner may choose to let a property as furnished is to appeal to a specific sub-section of tenants. Furnished rentals can be highly appealing to higher-end tenancies, such as successful young professionals, corporate lets, overseas tenants, short-term lets, or those people seeking a place to reside which is closer to work through the week. In many cases, such tenants will pay a premium to reside in a fully furnished property. By letting their properties as fully furnished, landlords can unlock new markets and achieve potentially more profitable rents whilst doing so.
From a tenant’s perspective, renting a furnished property means that they won’t have to spend a significant amount of their time and money furnishing a property when moving in. It provides additional flexibility and time savings. By providing additional furnishings as part of the tenancy. Landlords are giving tenants an additional level of service.
If done correctly, the rental uplift of letting a furnished property over the course of a couple of years may be more than the cost of the furniture, whilst also making the property more desirable and thus reducing voids. As such, letting furnished accommodation can be a profitable long-term strategy for property owners seeking to make additional returns.
Know Your Target Market for Your Rental Property
The most important step in letting out a furnished property is understanding your target market. That is, the tenants you wish to move into your property. Your target market will significantly impact the type and quality of furnishings that will be needed in the property. For example, holiday lets, with their short-term nature, allow more room for expressive and characteristic furnishings. Whereas, furnished accommodation for students will require more basic and replaceable furnishings, given the nature of the wear and tear they may accrue.