The decision whether to let your property furnished or unfurnished affects your rental income, tax position, void periods, and the type of tenant you attract. There is no universally correct answer; the right choice depends on your property type, local market, and tenant profile. This guide sets out the practical and tax differences so you can make an informed choice.
What 'furnished' means in practice
There is no statutory definition of 'fully furnished' in residential letting. In practice, landlords and agents use the following distinctions:
| Category | What is typically included | Common use case |
|---|---|---|
| Fully furnished | Beds, sofas, dining table and chairs, wardrobes, kitchen appliances (including white goods), soft furnishings | City centre flats, student lets, short-term lets |
| Part furnished | White goods and kitchen appliances only; sometimes beds but no soft furnishings or living room furniture | Mid-market family lets, professional tenants who have their own furniture |
| Unfurnished | White goods only (sometimes not even those); empty shell with floor coverings | Long-term family lets, tenants who prefer to use their own furniture |
The tax position: replacement domestic items relief
Since 6 April 2016, landlords of residential properties cannot claim a blanket wear and tear allowance. Instead, you can claim replacement domestic items relief when you replace an existing item with a new equivalent. The rules are:
- What qualifies: Furniture (sofas, beds, dining sets), furnishings (curtains, carpets), household appliances (washing machines, fridges, microwaves), and kitchenware
- Like-for-like replacement only: You can claim the cost of a replacement equivalent to the item you are replacing. If you upgrade (for example, replacing a standard washing machine with a high-spec model), only the equivalent cost of the original standard item is deductible
- Initial purchase does not qualify: You cannot claim the cost of furnishing a property for the first time, only subsequent replacements
- Disposal costs: If you incur a cost disposing of the old item (skip hire, collection charge), this is also deductible
- Unfurnished properties: No replacement domestic items relief is available because there are no items to replace; however all other allowable expenses (repairs, insurance, agents' fees, mortgage interest credit) apply equally
Furnished vs unfurnished: the key differences
| Factor | Furnished | Unfurnished |
|---|---|---|
| Setup cost | Higher, furniture, appliances, soft furnishings | Lower, white goods only (optional) |
| Typical rent premium | 5 to 15% in city centres and student markets; minimal in suburban family markets | Market rate |
| Void risk | Lower in high-turnover markets (students, young professionals) | Lower in stable long-term family markets |
| Tenant damage risk | Higher, more items that can be damaged | Lower |
| Tax relief | Replacement domestic items relief on replaced items | No replacement relief; other allowable expenses unchanged |
| Deposit protection | Same 5-week cap regardless | Same 5-week cap regardless |
| Tenant profile | Young professionals, students, short-term tenants | Families, long-term tenants with their own furniture |
The deposit cap applies equally
Under the Tenant Fees Act 2019, the maximum tenancy deposit is 5 weeks' rent (where annual rent is under £50,000) or 6 weeks' rent (where annual rent is £50,000 or more). This cap applies regardless of whether the property is furnished or unfurnished. You cannot charge a larger deposit to cover the value of your furniture. If a tenant damages furnishings, you must claim from the deposit within the scheme dispute process, or pursue the tenant separately for amounts exceeding the deposit.
HMO furnished requirements
If your property is licensed as an HMO, your licence conditions will typically specify minimum standards for furnishing. Bedrooms must be capable of providing a sleeping room, an unfurnished room with bare floorboards would not meet this standard. Check your specific licence conditions, as requirements vary between local authorities.
Furnished letting and the tenancy agreement
Whether your property is furnished or unfurnished, the tenancy agreement should include a clause describing the condition of the property and any items provided. For furnished properties, attach a detailed inventory signed by the tenant at check-in. For unfurnished properties, note the condition of white goods, floor coverings, and fixtures. Under the Renters' Rights Act 2025, all new English tenancies from 1 May 2026 must use a Periodic Assured Tenancy Agreement rather than a fixed-term AST.
Which should you choose?
- Furnished if your property is a city centre flat, a student let, or a property in a market with high turnover of short-term professional tenants who travel light
- Part furnished (white goods only) if your tenants are likely to be families or professionals who already own furniture and prefer a blank canvas
- Unfurnished if your property is in a suburban or rural area where the tenant market is dominated by long-term families who will bring their own furniture and are more likely to stay for years
Neither furnished nor unfurnished is the objectively better option. Furnished properties in the right market attract higher rents and shorter void periods. Unfurnished properties in long-let markets have lower ongoing costs and management overhead. If you are unsure, ask a local letting agent what their current tenants typically request.
Whichever approach you choose, use a correctly drafted Periodic Assured Tenancy Agreement with a clear inventory clause. See our Periodic Assured Tenancy Agreement and deposit deductions guide for more detail.