Property investors getting the most out of short-term let market boom


The popularity of short-term letting sites like Airbnb has soared in recent years, and investors are using the changing trends to their advantage.

British holiday habits are changing. Two thirds of people surveyed in a recent report by Skye Holiday Cottages holidayed in the UK last year, which was a 10% increase from the previous year. While the number of people going abroad for holidays saw a huge boom over the last couple of decades as flights became more affordable and package holidays attracted more families, it seems staycations are once again growing in popularity.

One driver behind the change could be the rise of environmental awareness and responsibility, as travel abroad is now acknowledged as a major contributor to carbon emissions. According to the survey, 33% of people want to be greener, while 20% intend to book more sustainable holidays in the future.

Healthy returns through holiday lets

While buy-to-let investment is still far ahead of the short-term letting market in terms of income security, regulation and investment figures, the less traditional approach to renting has been gaining traction among investors and homeowners alike, with sites like Airbnb allowing people to make extra cash through letting out their spare room.

According to the report, the average annual gross income of UK holiday let property owned by Skye customers was £20,000 last year, which is £2,000 higher than in 2017. While this may not be a reflection of the whole short-term rental market, which will include people who just let out rooms in their homes, for example, the positive trajectory demonstrates how the market is expanding.

Where are the opportunities?

As attitudes towards staycations change, alongside other factors such as people looking for short-term accommodation in between house moves, there is more opportunity to invest, and the rental income can in some cases be higher than for long-term lets. There is also a growing mortgage market for this type of rental property, although some lenders are still yet to catch up with the changes.

Liverpool was recently named as the highest yielding place for short-term lets, with yields reaching 27.2% based on an occupancy rate of 50% of the year – around double the rental yields achieved through long-term lets. Across the north-west, there are 10,200 active listings on Airbnb, a huge surge over the past few years, with Manchester a key city for the short-term let market, as well as the surrounding rural areas.

The tourist industry in London is also arguably one of the strongest in the country, with thousands flocking there every week for mini breaks, and the short-term let market there continues to expand. Airbnb is a popular choice in the city, with 80,000 individual listings there according to data from Inside Airbnb.

Beware of the rules

However, it is important to note that this style of investment is not without its pitfalls. The higher turnover of tenants compared to long-term rentals could increase the risk of damage, as well as the additional costs of cleaning between each stay, replacing broken items, wear and tear costs, and management costs where a company is employed to deal with tenant changeovers.

When investing in a property, it is important to find out about the local area’s rules on Airbnb and short-term lets, as some councils have restrictions in place. In London, there is a 90-day per year limit to the number of holiday let days a property can be used for without having to apply for planning permission to use an entire house or flat for short-term lets. If your property is leasehold, there may also be terms in the lease that prevent or restrict this type of letting, while if you live in a rental property, subletting a room is normally not allowed.

Read more about the comparison between Airbnb and traditional buy-to-lets here.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Property investors getting the most out of short-term let market boom


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.