The true cost of a void: what one empty month does to a five-year return

Ask a London landlord what an empty month costs and the answer comes back quickly: one month’s rent. £1,800 on a two-bed, £2,200 on a three-bed, whatever the property happens to make.

That number is wrong, and it’s wrong in a specific and expensive direction: it’s far too low, because it measures the void against your gross income when the damage actually lands on your net.

Here is the arithmetic, done properly.

The property

A three-bedroom London flat at £2,200 per calendar month. That sits between the ONS figure for average London rent on existing tenancies and the HomeLet figure for new lets, so it’s a fair middle.

Now the costs, on a fairly typical set of assumptions:

Net income: £9,235 a year. That’s the number that actually reaches you. Hold on to it.

What one empty month costs

The obvious loss is the rent: £2,200.

But the property doesn’t become free when it’s empty. It becomes slightly more expensive:

• Council tax reverts to you. Depending on borough and band, that’s roughly £150–£250 for a month. Most London boroughs have removed or heavily restricted empty-property discounts, and several apply a premium to longer vacancies.
• Utility standing charges continue, and you’ll want heating on through winter to protect the property: call it £60.
• Your insurer needs telling. Most policies restrict cover after 30 days unoccupied. Unoccupied cover costs more and covers less.

All-in cost of one empty month: roughly £2,400. Now put that against the £9,235 of net income.

Not 8% of your income. A quarter of your actual return. The reason is simple and unforgiving: your costs are fixed and your income isn’t. The mortgage doesn’t pause. The insurance doesn’t pause. Every pound of lost rent comes straight off the bottom.

Now stretch it across five years

One void month is an event. The five-year picture is a pattern — and the pattern has just changed.

Under the old system a London tenancy ran roughly two years, held in place at the outset by a fixed term. That floor is gone. Since 1 May 2026 a tenant can serve two months’ notice at any point and for any reason: a repair that took three weeks, a rent review they didn’t like, a job in Manchester, or nothing they’d care to explain. Turnover no longer happens at the end of an agreed period. It happens whenever the tenant decides.

So the numbers below assume the old rate — a move every two years, 2.5 turnovers in five years. Treat that as the optimistic end of the range rather than the middle of it. If service slips anywhere, yours or your agent’s, the real figure is higher.

At each turnover:

Across 2.5 turnovers: £14,600. Five years of net income at £9,235 a year: £46,175.

A third of the return on the asset, spent on the gaps between tenants. Most landlords have never seen this number because it never appears as a line item. It arrives as three separate small disappointments spread over sixty months, and none of them look like a third of anything.

The trade-off that catches people out

Here’s where the maths gets genuinely counter-intuitive, and where a lot of money gets lost quietly.

Your property is empty. An applicant offers 5% below your asking rent — £2,090 instead of £2,200. You decline and hold out for the full figure.

What holding out costs: the property earns nothing at roughly £73 a day, plus around £7 a day in council tax and standing charges. About £80 a day, or £560 a week.

What holding out earns: £110 a month, for as long as the tenancy runs.

So if you wait four weeks for the better tenant, you’ve spent about £2,250 to gain £110 a month.

Under the old fixed-term system, you could reasonably bet on that. Under periodic tenancies, you can’t. The tenant can serve two months’ notice at any point, and no contractual term obliges them to see out your break-even.

This doesn’t mean accept every offer. It means the calculation has changed direction: speed is now worth more than headline rent, because speed is the part you control and duration isn’t. A property priced to let in ten days at £2,090 beats one priced to let in five weeks at £2,200, and it isn’t close.

What actually shortens a void

Very little of it is clever. Most of it is timing.

What we do about it

Occupancy is the number our business lives on. Across our co-living portfolio in West and South West London we market future availability the moment notice is served rather than the moment a room falls empty, and we hold a standing database of tenants who’ve enquired previously — so a re-let usually starts with a list of interested people rather than a blank listing.

We also have long-standing relationships with major London employers who send us their incoming staff directly — young professionals relocating to the city who need somewhere good to live and a name their company already trusts. That’s a source of demand which doesn’t depend on a portal listing, doesn’t fluctuate with the seasonal market, and arrives with referencing that’s already halfway done.

That’s not a secret. It’s just a discipline applied consistently, which is harder than it sounds when you’re managing one property alongside a full-time job.

If never dealing with another void sounds like the easier way to own a rental property, get in touch. We’ll tell you quickly whether yours is one we’d take on, and what we’d pay you every month for the length of the agreement.