Updated: September 2026. This article was originally published in 2024. London’s rental market and tenancy law have changed materially since then.
For London landlords, the choice between Airbnb and short-term letting and a conventional residential tenancy is not simply a question of which produces the highest gross rent. The right model depends on net income, regulation, flexibility, property type and how actively the owner wants the property managed.
Short-term and flexible letting
Flexible accommodation can generate a higher nightly rate and allows pricing to respond to seasonality and events. It can also combine shorter leisure bookings with corporate and medium-term stays. In return, owners face higher operating costs for management, utilities, cleaning, linen, platform commissions, maintenance and guest consumables.
See our current guides to London Airbnb occupancy, Airbnb ADR in London and dynamic pricing.
Long-term letting in 2026
The Renters’ Rights Act reforms materially changed the private rented sector from 1 May 2026. The old assured shorthold tenancy framework is no longer the correct basis for comparing new mainstream private tenancies. Landlords need to consider the current assured periodic tenancy regime, the abolition of Section 21 and the updated possession and rent-increase procedures.
Our detailed Renters’ Rights Act 2026 guide explains the changes.
Which option makes more money?
There is no universal winner. A well-positioned flexible rental can produce more gross revenue than a long-term tenancy, but the cost base is also higher. Owners should compare net income using realistic assumptions for ADR, occupancy, management, utilities, platform fees, housekeeping and maintenance.
Our London case studies show how we compare individual properties. Some use actual performance and others are clearly labelled illustrative models.
Remember the London 90-day rule
Entire-home short-term letting in Greater London is generally limited to 90 nights per calendar year without the relevant planning permission. A forecast that assumes unrestricted 365-day short-let availability may therefore be inappropriate for many properties.
Read our 90-day rule guide.
Flexibility and owner use
Flexible letting can be attractive to owners who spend part of the year abroad or want to retain periods for personal use. A conventional tenancy is better suited to owners prioritising stable residential income and minimal turnover.
Management workload
Airbnb management involves enquiries, pricing, check-in, guest communication, housekeeping, inspections and maintenance. Owners can self-manage or use a London Airbnb management company. Our management fees guide explains typical cost considerations.
Which strategy is right for your property?
The decision should be made property by property. Location, lease restrictions, mortgage terms, insurance, planning position and likely long-term rent all matter. If you want a tailored comparison, request a free revenue estimate and we can model the options for your London property.
This article is general information, not legal, tax or investment advice.
