This is a perennial question for UK landlords and one that’s very topical at the moment against the backdrop of a record-breaking UK rental market. This month the average rent in London (based on traditional ASTs)  exceeded £2,500 for the first time ever. One of the reasons given for this unprecedented rise in rents was the shortage of supply of quality properties to rent, and a contributing factor given to explain this squeeze on supply is that many landlords have turned to Airbnb style short-term lets. This has had the effect of driving up rents for long-term rental properties as there were less available properties to rent, therefore driving competition for those properties up – and with it, the prices tenants are prepared to pay. It’s quite ironic that landlords moving to capitalise on increased short-term let revenue have also unwittingly driven up the value of traditional ASTS, which adversely makes it an even tougher decision for investors to decide. So, if you’re a landlord or property investor wondering if you should let your property on a long-term or short-term – read on, this blog is for you.  

Typically, short-term lets are said to achieve rents 30% higher than standard ASTs, in some popular tourist locations the figure can be up to 60% more. And this is really the key that dictates the kind of returns you can expect; location, location, location. It depends where your buy-to-let is. Here at RPA we produce comparable cash-flows for short-term and long-term lets for all the properties our clients are thinking to invest in, enabling them to see the difference and make a judgment call on whether the added expenses that come with running a short-term let are worth it. As rents vary hugely between geographical area, you really do need to analyse the figures carefully. A short-term let in central Birmingham, will not produce the same returns as a short-term let in Brighton. That said, the Brighton apartment yields will be highly affected by seasonal demand – so there’s no one-size fits all approach. Let’s look more generally at the pros and cons.