The pros and cons of furnished vs. unfurnished rentals in London

The property rental market in London has always been dynamic, volatile and highly competitive. One of the crucial decisions for landlords and investors is not only the location of the property to buy but also the presentation of the property when it is ready for tenants. Which would you go for – offering a fully furnished space or leaving it empty so tenants can make it their own? Both have their perks, but as data suggest, tenants tend to favour furnished homes.

Let’s understand the differences and see how investors can make an informed choice –

Furnished vs. unfurnished – What’s the difference?

Furnished properties have everything you need from the start—beds, sofas, dining tables, wardrobes, and main kitchen appliances—so you can move in and feel at home instantly. It’s a dream setup for the fast-growing wave of corporate renters, international students, and those looking for short term stays in London.

On the flip side, unfurnished properties might include a few basic appliances like a fridge or washing machine—or come completely bare. Some long-term renters like having the freedom to decorate their own place, but the cost and effort can be a bit much. These days, with the rental market being so competitive, time and convenience matter most — and that’s why for landlords, especially those based overseas, using professional furnishing services is becoming the top pick.

Pros of furnished rentals

• Increased rental returns – Based on Zoopla’s “Which improvements add the most value” report, furnished properties in London have the potential to offer a rental price 15-20% higher than unfurnished properties. Tenants are willing to pay a premium for convenience, preferring to avoid the inconvenience of starting anew.
• Shorter vacancies – There’s a strong demand for furnished properties in London, particularly in sought-after areas where expats, students, and professionals tend to live. According to the UK home furnishing market size & outlook (2030), the demand for move-in-ready homes will keep growing, especially for tenants looking for short- or mid-term stays. This trend means furnished properties are likely to have fewer vacant periods, making them a smart choice for landlords.
• Increased tenant demand – The convenience of moving into a fully furnished property is particularly appealing to tenants looking for a hassle-free living experience. Landlords and investors who furnish their properties often enjoy quicker lease signings and longer tenancies, helping to reduce turnover costs.
• Tax benefits – In certain cases, landlords may be able to claim capital allowances on furnishings, which can help to lower their income tax liability.

Cons

• Higher initial investment – Furnishing a property might feel like a big upfront cost—but it doesn’t have to be. With smart, well-curated furnishing packages, you can streamline the entire process, avoid surprise expenses, and maintain a cohesive look throughout. Think of it as a one-time investment that pays off with higher rental yields, faster occupancy, and happier tenants in the long run.
• Maintenance and wear – While wear and tear is inevitable, you don’t have to manage it on your own. Partnering with an experienced furnishing provider like InStyle Direct gives you access to high-quality, sustainably sourced furniture built to last. With return rates under 1% and warranty coverage, you can trust in the quality, durability, and long-term value of each item—leaving you with one less concern to deal with.

Success Story – Transforming a failing rental into a desirable property

Our furnishing partner transformed a lacklustre flat in North London into a highly sought-after rental property. Despite its excellent location, the landlord had difficulty attracting high-quality tenants. After implementing a tailored furnishing package, the property underwent a remarkable makeover. Interest in the property increased by 60%, and it soon began attracting a steady flow of potential renters. The property was let within just seven days, at a rental rate 15% higher than previously.

Pros of unfurnished rental properties

• Cost-effective – Unfurnished properties are often favoured by long-term tenants looking for more affordable rental options. However, the downside is that these homes may generate less interest overall, resulting in longer vacancy periods and a slower rental process.
• Tenant flexibility – Offering an unfurnished space gives tenants the freedom to style and furnish it to their liking. While this creative flexibility can be a plus, it might lead to delays in securing discerning tenants and might also result in lower rental returns.
• Less wear and tear on furniture – Landlords can protect themselves from potential damage by choosing not to furnish their properties. However, such decisions may result in longer vacancy periods, especially in competitive rental markets where tenants are drawn to fully furnished properties that are move-in ready.

Cons

• Longer vacancy periods – Unfurnished homes can take longer to rent out because tenants need to spend time and money on furnishing them. Based on data from Rightmove, furnished properties rent 21% faster than unfurnished ones, showing a growing preference for convenient and comfortable homes.
• Reduced rental prices – Choosing an unfurnished property could mean you miss out on higher rental prices that furnished homes can bring. For example, a study by OnTheMarket found that in some areas, a furnished two-bedroom flat could fetch more than £100 extra per month compared to an unfurnished one.

Key considerations for landlords to look for –

Budget & ROI – Although furnishing requires an initial outlay, our furnishing partner offers affordable, design-led packages that provide excellent value. These solutions help minimise vacancy periods and attract higher rental income, ultimately enhancing your long-term return on investment.

Profile of tenants – Consider the type of tenants your property is likely to attract. Expats, students, professionals, and short-term renters—who are growing in number in London—tend to prefer furnished homes for the convenience of moving in without the hassle. While in some cases long-term tenants may lean towards unfurnished properties for the freedom to personalise, furnished homes remain popular with a wider range of renters. This can help reduce vacancy periods and ensure a steady stream of interest from potential tenants.

Raising property value – Properties that are well-furnished and ready to move into definitely stand out more in photos, grabbing attention and making your listing more appealing. In fact, the UK Home Furnishing Market Outlook 2030 suggests that a well-furnished home could boost its perceived value by as much as 15%, making it even more tempting to potential renters.

Read more on – How professional furniture packages can boost your investment as a first-time landlord?

In the fast-paced London rental market, furnished properties stand out with an edge. They attract a broader range of tenants, cut down on vacancy periods, and increase your rental income potential. While unfurnished properties offer flexibility and a lower upfront cost, furnished homes draw in higher-paying tenants and consistent demand.

The right furnishing package can boost your property’s value, slash vacancy periods and deliver quicker returns. Whether you’re targeting professionals or students, a fully furnished home sets you up for lasting success. Get in touch today to see how we can help.