I'm not sure whether to let my property furnished or unfurnished - what are the pros and cons?

Question

I’m not sure whether to let my property furnished, unfurnished or part-furnished: What’s the pros and cons of the different options?

Answer

There are many options open to you with regards to how you choose to let your property, and it’s not necessarily as simple as leaving your furniture in, or taking it out!

There are income tax breaks available to landlords who choose to go down the furnished route, and council tax breaks for those who choose unfurnished… so it’s really worth thinking hard about before you make the decision!

Furnished

A furnished property allows your tenants to move straight in, without having to provide any of their own furniture. If you choose to go down this route, you are able to claim the 10% ‘wear and tear’ allowance on part of your tax bill – at least until 2021.

Previously, you would have been able to claim the discount on your full income, however following the shake-up of letting legislation in the 2015 budget, in 2017-18 landlords will only be able to apply the existing relief rules to 75% of their finance costs with the remaining 25% using the basic rate reduction. Until 2012, the proportion will change to 50:50, before the basic rate applies in full from 2020-21.

In the meantime, the deduction is provided to cover the costs associated with repairing:

Large movable furniture or furnishings, such as beds or sofas
Televisions
Fridges and freezers
Carpets and floor-coverings
Curtains
Bed linen
Kitchenware (saucepans, crockery and cutlery)
White goods (washing machines, ovens)

However, do be aware that even if you advertise your property as fully furnished, you should be open to negotiation if your tenant requests it. They may not require all of your furniture, so if you find a tenant that ticks all of your boxes, do try to be as flexible as you can with regards to what you are prepared to remove from the property.

Unfurnished

As the term suggests, this option means you are providing simply they empty property, with no furniture at all. Many tenants prefer this option, as they will have their own furniture, and will want to make the property their own.

It is expected that floor coverings, basic white goods (fridge, freezers, cookers, washing machines) and in some cases window coverings are supplied, so you should consider finding room for these basics in your budget.
There is also a hidden potential benefit to letting your property unfurnished. In void periods, some councils will give landlords relief from council tax if the property is unfurnished – not the case if it is furnished. This is not that case with all areas, so do check with your local council, but it is something to consider before making your decision.

Part-furnished

This is possibly the most confusing term – it is very open to interpretation!

Generally, you would expect to have to provide all of the basic elements - floor coverings and basic white goods (fridge, freezers, cooker, washing machine) – but also the ‘significant’ items of furniture, such as wardrobes, table and chairs– come with the property, but your tenant will supply their own ‘soft furnished’ items, such as sofas and beds, and electrical items.

This can be a good option if you have large items of furniture that fit well in a property, but do not want the responsibility of having to maintain easily damaged items, such as fabric sofas.

You should also consider that if you have expensive furniture, you might not want to leave it in a tenanted property, but cheap furniture may not last very long – and if the property has been let with the furniture, you would be obligated to replace it for your tenant.

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