Void cost

Most landlord cash-flow models include a void allowance as a percentage of gross rent: commonly 4% (2 weeks per year) or 8% (4 weeks per year). The percentage is a useful planning aid but it hides the real economics of any individual void. A six-week void on a £1,500 PCM London BTL costs the landlord roughly £2,800 once council tax during the empty period (typically £300–500 depending on band and council), utilities standing charges (£80–150), pro-rated insurance (£30–60), pro-rated mortgage interest (£500–900) and re-let costs (£400–1,200 in agent finder fee, advertising, references, inventory and check-in) are added on top of the lost rent. The headline 4% void allowance built into the original yield calculation accounts for the £2,070 lost rent only: the other £700–1,000 is a hidden drag on net yield.

Council tax during voids is the largest hidden line. Section 11 of the Local Government Finance Act 1992 makes the owner liable for council tax on an unoccupied unfurnished dwelling. From 1 April 2024 most English councils have removed the historic 100% empty-property discount and many have introduced a 100% premium after 12 months of vacancy (200% after 24 months, 300% after 5 years, 400% after 10 years). A band D property in a typical English council costs the landlord around £160–220 per month of council tax during voids, payable from day 1 in roughly half of councils and from day 15–30 in the rest. The calculator lets you input the band D-equivalent annual figure for your specific property.

Mortgage interest does not pause for voids. On an interest-only BTL of £200,000 at 5.5% the daily interest cost is roughly £30. A 42-day void carries £1,260 of interest paid out of the landlord’s pocket with no rent coming in. Capital repayment on a repayment mortgage continues at the same time. This is the line most often missed in DIY void-cost spreadsheets because the monthly direct debit feels like a fixed background expense rather than a void-driven cost.

Re-let costs scale with the strategy. A self-managed landlord using OpenRent or Spareroom typically spends £100 to £250 (advertising, references via OpenRent / RentProfile, basic inventory). A high-street agent’s tenant-find fee is about a month’s rent on agents’ published lists. Mid-tier hybrids (Hunters, Northwood, JD Wood) sit in between. The calculator lets you input the actual line items so the projection reflects your operating model rather than a one-size-fits-all rule of thumb.

The Renters’ Rights Act 2025 lengthens average void duration on tenant-driven moves. Pre-RRA, a tenant on an AST gave one month’s notice and a co-ordinated end-of-tenancy / new-tenancy handover was usually feasible. Post-RRA the assured periodic tenancy gives the tenant a flat two months’ notice with no fixed-term anchor; in practice tenant-side moves cluster around the start of the month with a 2–5 day overlap window for cleaning, inventory and minor remedial works. Average voids on tenant-driven moves are widely expected to lengthen from 14–21 days to 21–42 days as the market re-prices the longer notice. Landlords whose annual yield depends on near-zero voids should re-test the model under the longer assumption.

The annual yield drag output is the most useful number for portfolio decisions. A £2,800 void on an £18,000 annual rent is a 15.6% reduction in gross income for the year: enough to flip a marginal property from positive to negative cash flow once Section 24 mortgage interest restriction is applied. Use the calculator output to set realistic asking rents (slightly below market often clears voids in 7–14 days), to compare DIY vs agent re-let strategies, and to budget for the longer post-RRA void window without overstating the headline yield.