Is short-term or long-term rental more profitable for UK landlords?

Short-term rental is more profitable than long-term rental for most UK landlords, generating 40% to 80% more gross income and, after management fees and operating costs, typically £8,000 to £15,000 more net per year for a 2-bedroom city property. Long-term tenancies offer stability and lower effort, but short-lets are pre-paid per booking, eliminate rent arrears and carry no repossession process.

A long-let runs on an Assured Shorthold Tenancy, where a tenant pays a fixed monthly rent for six to 12 months. A short-let runs on a licence to occupy, where each guest pre-pays for a stay of a few nights. The legal frameworks, risk profiles and income patterns are fundamentally different.

The Renters' Rights Bill abolishes Section 21 no-fault eviction and moves all new tenancies to a rolling periodic basis, making repossession slower and more evidence-led. For long-let landlords that raises arrears and void risk; short-lets sit outside the Bill entirely because guests are licensees, not tenants. The Furnished Holiday Let tax regime was abolished from April 2025, removing one short-let tax advantage, but the income and risk gap remains wide.

Unlike London's 90-night cap under the Deregulation Act 2015, Manchester, Liverpool and Stoke-on-Trent have no citywide letting limit, and strong event demand supports high short-let occupancy for well-managed properties.

Even after a 12% to 15% plus VAT management fee, cleaning, utilities and platform commission, a managed short-let typically nets £8,000 to £15,000 more per year than the equivalent long-let for a 2-bed city property. These figures are typical market ranges for cities like Manchester and Liverpool, indicative rather than guaranteed.

We disclose gross income with a clear disclaimer rather than inflated net promises, run no lock-in contracts with a 30-day notice period, and combine national-scale dynamic pricing and 24/7 guest systems through the Houst partner network with local cleaning and care in Manchester, Liverpool and Stoke-on-Trent. Because every short-let booking is pre-paid, the arrears and repossession risk that has grown under the Renters' Rights Bill simply does not apply. Where income certainty matters more than maximum income, we can also discuss guaranteed rent in select cities.

A 2-bed Manchester flat on a long-let at £1,200 a month grosses £14,400 a year, minus a typical 4-week void of about £1,100 between tenants, leaving around £13,300 net. The same property managed as a short-let at roughly £3,000 a month gross, retaining about 80% after the management fee, cleaning and utilities, nets around £28,800. That is about £15,500 more per year, with no arrears and no eviction process. Figures are indicative.

Typically 40% to 80% more gross, and after fees and costs, £8,000 to £15,000 more net per year for a 2-bedroom city property.

It varies month to month, but annually it is higher and every booking is pre-paid, so there is no rent arrears risk. Dynamic pricing and multi-platform distribution smooth the variability.

Short-lets have more turnover, but each stay is inspected, so issues are caught in 24 to 48 hours. Most landlords report better property condition under short-let management than under a long-term tenancy.

Short-let is structurally lower risk: every stay is pre-paid, guests leave on a set date, and there is no eviction process. The Renters' Rights Bill has made long-let repossession slower and more evidence-led.

When the property is in a low short-let demand area, when mortgage or insurance terms restrict short-letting, or when you value minimal involvement over maximum income.