Home » Blog » What are the costs involved in holding a vacant property in London?

What are the costs involved in holding a vacant property in London?

Shannon
October 19, 2025
8:51 pm
No Comments

Leaving a property empty in London may seem harmless at first, but in reality, vacant homes can quietly drain your finances. Whether you’re waiting to sell, renovating, or holding an investment, it’s important to understand the true cost of keeping a property unoccupied. From rising Council Tax to the opportunity cost of lost income, the numbers add up fast.

This issue is accelerating: as of 2024, the number of empty homes in London hit a record high of over 93,600, with more than 38,000 classified as long-term vacant (unfurnished for over six months). For London boroughs, a property is generally classified as vacant when it is unoccupied and substantially unfurnished for a set period. This triggers a specific set of financial obligations and risks.

We’ll break down the direct and Indirect costs of holding an empty property to help property owners make informed decisions about their empty homes.

Council Tax: The Surprising Expense

Do you think your empty house means no council tax? Think again. You’ll initially pay the standard rate, but this increases over time. Here’s the catch:

Under 2 years empty: Same council tax as an occupied property.
Over 2 years, but less than 5: Prepare for double the council tax bill.
Over 5 years empty: Uh-oh. Now you’ll be paying a shocking triple the normal amount.

While limited exemptions exist for properties undergoing major structural repairs or those vacant during probate, these reliefs are strictly time-limited and require extensive proof.

Insurance for an empty property

Many insurance policies include a clause stating that if a property remains unoccupied for 30-60 days, the coverage becomes void. This can make it more difficult to secure insurance for a vacant property, and it often limits the number of insurers willing to offer coverage.

Even when you do find a company willing to insure an empty property, there are usually strict conditions attached. Common requirements often include:

Completely draining the heating system
Conducting regular inspections, often weekly

In addition, premiums are typically higher, and your choice of insurers will be more limited. It’s also important to understand the potential legal risks. For example, if a fire starts and spreads, you could face not only financial liability for damages but also potential criminal negligence charges.

Maintenance costs

An empty property doesn’t stop ageing; it simply accelerates its decline. You incur costs not for use, but for preventing deterioration and decay.

Gardening: Even if the house doesn’t have a large yard, there could still be associated landscaping expenses. Paying for basic maintenance like trimming and weeding prevents the property from looking neglected and helps preserve its curb appeal.
Cleaning: If you ever plan to rent the property out again or sell it, you can’t simply leave it in a dusty and dirty condition. Regular deep cleaning is necessary to prepare the home for new occupants and prevent long-term buildup or pest problems.
Security: Investing in a security system is often a wise move, especially since no one is living in the home to monitor it. Measures like alarms or timers for lights can deter theft, vandalism, or unauthorized entry.
Repairs: Empty homes will still deteriorate over time due to weather, pests, and normal wear and tear on the structure. Addressing small issues quickly through proactive maintenance prevents them from turning into significant, costly damage.
Utility Bills: You’ll still have to pay a standing charge for services like electricity and water, even when no one is using them. Some owners use automatic timer switches to turn lights on, which creates the illusion that the house is lived in and helps deter burglars.

Risk of Vandalism and Squatters

Empty London properties are big targets for vandalism & criminal damage. Broken windows, stolen copper pipes, and a lot of graffiti are common and will always result in a huge insurance excess fee before you can start repairs.

While squatting in residential buildings has been a crime in England and Wales since 2012, removing squatters takes time. Legal action, like an Interim Possession Order or Claim for Possession, can cost around £5,000 in legal fees, plus clean-up and repair costs. If an owner ignores the property for years, there’s even a risk of someone claiming ownership through adverse possession.

The Lost Opportunity is the Biggest Cost

The hardest cost to measure, but possibly the most important, is the Opportunity Cost. This is the money you could have made if the property hadn’t been sitting empty.

Lost Rent: This is a clear, countable, and ongoing stream of money you give up. Looking at the average monthly rent for a similar property in your London area shows the massive financial loss you face every month it stays empty. For a typical London flat getting £1,800 per month in rent, this equals a loss of £21,600 per year.
Lost Access to Cash: Holding an empty property means a lot of money is tied up and hard to get to. Selling the property or working with a developer gives you the chance to get fast access to money.
The Emotional Cost: Finally, there is the stress, time, and worry that comes with owning a valuable asset that is only costing you money and causing a security risk.

Conclusion

Now that you have a clear picture of all the potential expenses involved in holding a vacant investment property, you can calculate your total monthly financial drain. When you combine the council tax, insurance premiums, maintenance fees, and, most critically, the massive opportunity cost of lost rent, you’ll arrive at the true and often shocking cost of keeping your property unoccupied

Have a Site with Development Potential?

Unlock the value of your asset without taking on the financial risk. We cover all planning costs and offer flexible agreement options—from clear-cut purchase to joint ventures—designed around your specific goals.