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Key Takeaways:
- Empty rental property costs can quickly turn a real estate asset into a liability, costing London landlords up to £12,000 per year.
- Vacant properties still pay council tax, with charges increasing the longer it stays empty.
- Standing charges still apply even if your property does not use gas and electricity. You need to pay this fee for access to utility services.
- Properties that sit empty for long periods deteriorate more quickly, increasing repair and maintenance costs.
- Flexible letting keeps properties occupied and offsets holding costs.
What Are The Empty Rental Property Costs In London?
Before you leave your property vacant, ask yourself first if you truly understand what the empty rental property costs in London.
Leaving a property empty may seem like the simplest solution if you plan to sell it or are preparing to live overseas. But if you look closely at the cost implications of this decision, you might change your mind about leaving it vacant for a long time.
Even if it seems like an empty property is cost-free, it’s not. It incurs holding costs that can add up quickly if you’re not careful.
Holding costs or burn rate refer to the ongoing expenses incurred by a property even when it’s not used or generating income.
Among the expenses are mortgage interests or payments, security fees, property upkeep, etc. You also have to think about council tax, utility bills, insurance premiums, and many more. Leaving your empty property to incur these costs can make it a liability.
As you make a decision to leave your property empty or not, take a deeper look at the actual cost of leaving your property empty for a long period.
5 Costs of Keeping an Empty Rental Property
Leaving your property unoccupied can cost more than £12,000. The longer it stays empty, the more it will cost you out of pocket. Without a strategy that will offset these costs, your vacant property can quickly drain your finances.
To understand these costs, consider the expenses incurred when your property is empty.
Council Tax
This is one of the highest costs you have to face when you keep an empty property.
The London City Council will charge full council tax on empty homes. If it stays empty for more than a year, you will be charged a long-term empty property premium on top of the council tax. The charges are as follows:
- One year or more but less than 5 years, an additional 100% levy (total of 200% charge)
- 5 years or more but less than 10 years, an additional 200% levy (total of 300%)
- 10 years or more, an additional 300% levy (total of 400%)
Did you know:
From 2025 to 2026, a £320,000+ property in the City of London that sits empty for a year or more (but less than 5 years) will be charged council tax worth £5,096.28, while a property that’s been vacant for 10 years or more will be charged £10,192.56. – City of London
Utility bills
Standing charges are the cost you pay utility companies for access to gas and electricity. You pay the minimum charge even if you don’t use any of it.
That means empty properties still pay utility bills, specifically electricity and gas. Based on Ofgem’s energy price cap, the charges are:
- For electricity, the charge is £0.55/day (January to March 2026) and £0.57 (April to June 2026)
- For gas, the charge is £0.35/day (January to March 2026) and £0.29 (April to June 2026)
This will cost you around £101.87 in electricity and £57.59 in gas, and this is just for half the year. You could end up paying more than £300 on utility bills, and you’re not even using the property.
Insurance premiums
Insurance providers usually offer special coverage and charges for empty homes. If your property is currently under a standard home insurance, it will only be covered for up to 30 to 60 days of vacancy.
Beyond that, you can no longer make claims in case something happens to your home while it sits empty.
If you ask an insurance provider to cover your empty home, you’ll be charged a higher premium because unoccupied properties are more susceptible to electrical fires, vandalism, etc. The chances of issues arising are higher because there’s no one there to notice them.
Property deterioration
This is a silent cost that property owners should be aware of. It’s not visible unless you visit the empty property regularly.
Even if it’s just months, your empty home can experience:
- Electrical and wiring failures
- Damp and condensation issues
- Pest infestations
- Plumbing problems
- Dust accumulation
…And other wear and tear caused by inactivity.
These issues can negatively affect your property’s value and lead to major repair costs. If you’re planning to sell the property, it might cost you more to repair damages before you can get an offer.
Opportunity cost
Finally, there’s the opportunity cost of leaving a property empty. Think about the average rental income in London. Based on the October 2025 data, the average rental income in London is £2,260. If you had your property rented for a year, that would have been an annual income of £27,120.
That is how much you have lost because you kept your property empty.
The Solution to Reduce Empty Rental Property Costs
Instead of leaving your property empty, why not turn it into a stable source of income?
Flexible letting has proven effective in reducing costs associated with empty rental properties in London. The ability to switch from short-term, mid-term, and long-term letting ensures your property stays occupied and earning throughout the year.
Even if you have plans to sell the property, the flexible letting strategy allows you to schedule bookings around buyer viewings. Or if you are living abroad and you decide to visit London, you can block off dates so you can still use your property between bookings or leases.
As long as your rental property is well-managed, flexible letting can provide a stable source of income while keeping your home well-maintained.
Property management companies like City Relay provide end-to-end services that will keep your property occupied and in good condition. You can rely on existing systems and property tools that will implement dynamic pricing strategies that maximise income potential.
Local property expertise will also benefit you by making your property visible to the right guest or tenant. They will handle listing optimisation, guest communication, booking management, in-house cleaning and maintenance, as well as compliance checks and risk management.
If you’re considering your options when it comes to your empty property, get a property management company that specialises in flexible letting. This will offset expenses while keeping your property in good condition for future plans.
Let City Relay assess your property’s earning potential. We’ll share our letting management services and how we can help your property generate income while staying compliant.
FAQs
How much does it cost to leave a property empty in London?
Leaving a property empty in London can make you pay more than £12,000 a year. The council tax alone for a £320,000 property in the City of London that’s been empty for 10 years or more can be charged £10,000+ in 2026.
You also have to consider the higher insurance premiums to cover the vacant property, the standing charges from utility companies, holding fees, mortgage payments, and even property deterioration costs.
Do you pay council tax on empty properties in London?
Yes, you need to pay council tax on empty properties, even if you have a valid reason, such as the property is for sale or under renovation. And if the property stays empty for more than a year, you need to pay a levy on top of the usual council tax band.
For properties that have been vacant for more than a year but less than 5 years, the council tax charge is 200%. If it stays empty for more than 5 years but less than 10 years, it jumps to 300%. For properties that have been empty for more than a decade, the council tax become 400%.
This alone is a good reason for property owners to ensure their properties never stay empty for long periods.
Can letting a property temporarily reduce the cost of empty property?
Yes. At the very least, the rental income can offset holding costs and maintenance costs.
When you use the right letting strategy, you can generate income without compromising your initial plans for your property. For instance, if you plan to sell it, you can use flexible letting to control the availability of your property for buyer viewings. The same is true if you live abroad and want the property to be available when you return to London for a visit.
By letting your property, you also ensure it is well-maintained. For shortlets, cleaning between bookings helps keep the property in good condition. For mid-term or long-term letting, the tenant will ensure the property is habitable and will report to you if any repairs are needed.
