Running costs and void periods
The full annual budget for a UK rental: what each line costs, which ones are legally required, and how they turn gross yield into net.
Every recurring cost, line by line
| Line | Typical range | Notes |
|---|---|---|
| Full management | 8% to 15% of rent | Tenant-find only: 2 to 4 weeks' rent |
| Maintenance | 0.5% to 1% of value a year | Older stock sits at the top of the range |
| Landlord insurance | 150 to 400 pounds | Buildings plus landlord liability |
| Gas safety record | 60 to 100 pounds | Annual, legally required |
| EICR | 150 to 300 pounds | At least every five years |
| EPC | 60 to 120 pounds | Valid ten years, minimum rating E |
| Service charge and ground rent | Varies | Leasehold flats only; check before offering |
| Void allowance | 2 to 4 weeks' rent | Plus council tax and utilities while empty |
Ranges are indicative for 2026 and vary by region and property type. Licensing fees apply in some councils and for HMOs.
Two of these lines deserve respect beyond their size. Maintenance is lumpy: nothing for two years, then a 3,000 pound boiler and roof repair in the same winter, which is why the percentage allowance should be banked, not just acknowledged. And leasehold service charges can move; a flat with a 1,200 pound charge and a major works bill pending behaves very differently from the same flat without one.
Voids: the cost of an empty property
A void week costs more than a week of rent. The mortgage payment continues, council tax liability passes to you, utilities and standing charges run, and re-letting usually involves cleaning, small works and sometimes a tenant-find fee. A four-week void on a 750 pound a month property is realistically a 1,000 to 1,300 pound event once those extras are counted.
Void risk is mostly a location variable, which is why we treat tenant demand as one of the six signals in how to choose a location. In high-demand areas the question is which applicant to accept; in weak areas it is whether anyone applies this month. No discount on the purchase price fixes a structurally thin tenant pool.
The compliance checklist (England)
Legally required before and during a tenancy
- Annual gas safety record (CP12) for any property with gas appliances.
- Electrical installation condition report (EICR) at least every five years, with a copy to the tenant.
- Energy performance certificate rated E or better; government has consulted on raising the minimum to C, so check current rules before buying low-rated stock.
- Smoke alarms on every storey and carbon monoxide alarms in any room with a fixed combustion appliance.
- Deposit protected in an approved scheme within 30 days, with prescribed information served.
- Right to rent checks on all adult occupiers, and the current How to Rent guide given to the tenant.
- HMO licence for properties with five or more occupiers from two or more households; many councils also run additional or selective licensing schemes.
The Renters' Rights Act, passed in 2025, is reshaping tenancy law in England, including the end of section 21 notices, periodic tenancies as standard and a new landlord database, with implementation phased in stages. The running-cost effect is modest for compliant landlords, but factor in ombudsman and database fees, and check GOV.UK for the commencement dates that apply when you let.
A worked annual budget
160,000 pound terrace letting at 850 pounds a month
Gross rent: 10,200 pounds. Management at 10%: 1,020. Maintenance at 0.75% of value: 1,200. Insurance: 250. Certificates averaged per year: 150. Void allowance of three weeks: 590. Total running costs: about 3,210 pounds, or 31% of gross rent.
Net operating income is therefore about 6,990 pounds, a 4.4% net yield on the purchase price against a 6.4% gross yield. With a 75% loan-to-value interest-only mortgage at 4.5%, interest takes 5,400 pounds, leaving roughly 1,590 pounds of pre-tax cash flow. That is the honest shape of a typical modern buy-to-let: solid, not spectacular, and entirely dependent on buying in the right area at the right yield.
Reducing the drag without cutting corners
The controllable lines are management and maintenance. Self-managing saves the agent fee but costs your evenings and requires you to keep pace with compliance personally; it suits local landlords with one or two properties and patience. On maintenance, the cheapest pound is spent at purchase: a surveyed, recently rewired property with a young boiler will undercut a bargain doer-upper on five-year running costs more often than the spreadsheet suggests. What you should not trim is the void allowance or the safety certificates; one is your shock absorber and the other is the law.
Frequently asked questions
- How much should I budget for buy-to-let running costs?
- A widely used planning assumption is that 25% to 35% of gross rent disappears into running costs before the mortgage: agent fees, maintenance, insurance, compliance certificates and an allowance for voids. On 12,000 pounds of annual rent that is 3,000 to 4,200 pounds.
- What is a void period?
- A void is any period the property sits empty between tenancies, producing no rent while the mortgage, council tax and utilities keep running. Sensible underwriting assumes two to four weeks of void per year on a standard single let, even if many years deliver none.
- How much do letting agents charge?
- Full management typically costs 8% to 15% of monthly rent depending on the region and service level, with tenant-find-only services usually charging the equivalent of two to four weeks' rent as a one-off fee.
- What safety certificates does a rental property need?
- In England a landlord needs an annual gas safety record for any gas appliances, an electrical installation condition report (EICR) at least every five years, an EPC rated E or better, working smoke alarms on every storey, and carbon monoxide alarms in rooms with fixed combustion appliances. Deposits must be protected in a government-approved scheme within 30 days.
- What is a realistic net yield on a UK buy-to-let?
- After running costs but before mortgage interest, a property bought at a 7% gross yield typically nets between 4.5% and 5.5%. After mortgage interest at 75% loan to value, cash-on-cash returns vary widely; the point of underwriting is to know your number before you buy, not after.
Sources and further reading
Written by the Clarity Property Investments research team. Last reviewed 12 June 2026. This article is general information, not financial or tax advice.