London remains one of the world’s top tourist destinations, attracting millions of visitors annually for business, leisure, and events. With Airbnb and other short-term rental platforms continuing to thrive, investing in a short-term rental property in London can be highly lucrative. However, choosing the right area is crucial to maximize returns, ensuring high occupancy rates and strong rental yields.
As we move into 2025, several key factors—such as upcoming infrastructure projects, tourism demand, and local regulations—shape the best areas for short-term rental investment. Below, we explore the top locations in London for short-term rental investments in 2025.
1. Westminster (Central London) – Best for Tourist Demand
Why Invest?
• Home to iconic attractions such as Big Ben, Buckingham Palace, and the Houses of Parliament.
• High year-round tourist demand, ensuring strong occupancy rates.
• Well-connected via Victoria, Westminster, and St James’s Park stations.
Rental Yield & Potential Returns
• Average Airbnb Nightly Rate: £200–£350
• Estimated Occupancy Rate: 80%–90%
• Potential Gross Yield: 5%–7%
Things to Consider
• Strict regulations: Westminster Council has been cracking down on illegal short-term lets, so ensure compliance with the 90-day annual rental limit.
• Higher property prices mean larger upfront investment.
2. Camden & King’s Cross – Best for Young Travelers & Business Stays
Why Invest?
• A hotspot for young professionals and students, with attractions like Camden Market, The British Library, and Regent’s Canal.
• King’s Cross St. Pancras offers excellent transport links, including Eurostar access to Europe.
• Tech companies like Google and Meta have headquarters here, driving demand for business stays.
Rental Yield & Potential Returns
• Average Airbnb Nightly Rate: £150–£250
• Estimated Occupancy Rate: 75%–85%
• Potential Gross Yield: 6%–8%
Things to Consider
• Some areas in Camden have a bohemian vibe, which may not appeal to all travelers.
• Short-term rental restrictions are increasing, so check with the local council.
3. Shoreditch & Hoxton – Best for Creative & Corporate Travelers
Why Invest?
• A trendy neighborhood known for its art scene, nightlife, and tech startups.
• Popular with digital nomads, creatives, and young professionals.
• Close to Liverpool Street Station, offering easy access to financial districts.
Rental Yield & Potential Returns
• Average Airbnb Nightly Rate: £140–£220
• Estimated Occupancy Rate: 70%–85%
• Potential Gross Yield: 7%–9%
Things to Consider
• Weekend demand is high, but midweek occupancy can vary.
• Competition with boutique hotels and serviced apartments.
4. South Bank & Waterloo – Best for Luxury & Riverside Rentals
Why Invest?
• Proximity to attractions like The London Eye, Tate Modern, and Shakespeare’s Globe.
• Ideal for both tourists and business travelers, given its location near major offices.
• Strong transport links via Waterloo Station.
Rental Yield & Potential Returns
• Average Airbnb Nightly Rate: £180–£300
• Estimated Occupancy Rate: 80%–90%
• Potential Gross Yield: 6%–8%
Things to Consider
• Premium property prices can result in a longer return on investment.
• Some new developments may impose leasehold restrictions on short-term lets.
5. Canary Wharf – Best for Corporate Travelers & Long-Term Stays
Why Invest?
• A major financial hub, attracting bankers, consultants, and business professionals.
• High demand for short-to-medium-term stays from corporate travelers.
• New Elizabeth Line (Crossrail) significantly improves transport connections.
Rental Yield & Potential Returns
• Average Airbnb Nightly Rate: £130–£200
• Estimated Occupancy Rate: 70%–85%
• Potential Gross Yield: 6%–9%
Things to Consider
• Lower weekend demand, as business travel dominates the market.
• Increasing number of co-living and serviced apartments creating competition.
6. Greenwich – Best for Family-Friendly & Budget Travelers
Why Invest?
• Home to attractions like Greenwich Park, Cutty Sark, and the Royal Observatory.
• Less competitive market compared to Central London, but still popular with tourists.
• Good transport links via the DLR and riverboat services.
Rental Yield & Potential Returns
• Average Airbnb Nightly Rate: £100–£180
• Estimated Occupancy Rate: 65%–80%
• Potential Gross Yield: 6%–8%
Things to Consider
• Slightly longer commute times to Central London.
• Seasonal demand fluctuates more compared to city-center locations.
Key Takeaways for 2025
✅ Westminster & South Bank – Best for luxury short-term rentals due to high tourist demand.
✅ Camden & Shoreditch – Great for young professionals, creatives, and short business stays.
✅ Canary Wharf – Ideal for business travelers, but weekend occupancy may be lower.
✅ Greenwich – Family-friendly, offering lower-priced investments with strong potential.
As London’s short-term rental market evolves in 2025, choosing the right area is key to maximizing occupancy rates and rental yields. While Central London areas continue to perform well, emerging districts like Canary Wharf and Greenwich offer great investment opportunities.
Thinking of investing?
Before purchasing a short-term rental property in London, ensure you understand local regulations, the 90-day rule, and licensing requirements. If you’re looking for a strong ROI, focusing on tourist-heavy or business-friendly areas will help secure long-term success.
Get in touch with us for a more detailed discussion and a custom forecast of revenue/cost for your specific property.
