Finding the right rental property is often a demanding and overwhelming task. The process is getting increasingly difficult due to the number of landlords and property owners switching to short term lets for extra flexibility. Remote working has also increased the number of so-called ‘digital nomads’ – people who mix work with travel to see the country/world. As a result, demand for short term lets is growing and showing no signs of slowing down.
What are short term lets?
Most rental agreements that we are familiar with last for periods of one year or more. Usually, landlords like to have a long term outlook to ensure that they get enough rental income to cover their mortgage payments. Any rental agreement signed for less than six months is considered a short term let. Although it can be for up to six months, more often than not, short term lets last from a couple of days to a month.
They are used mainly by holidaymakers and corporate workers staying somewhere long enough to need the amenities of a typical home. As previously mentioned, there is also an increasing demand from digital nomads who stay for short periods in different locations due to the flexibility provided by remote working.
What are the pros and cons?
As with anything in the property market, there’s many advantages and disadvantages to short term lets. So if you’re a landlord, it’s essential to understand these before deciding to switch over from long-term rentals.
Advantages
- Short term lets provide a flexibility that can’t be had with a longer rental, as you can plan for periods where you need the property to be vacant.
- Difficult tenants won’t stay for long. With long-term lets, it’s inevitable that you’ll encounter bad tenants. Eviction can be a long and, at times, costly process. With short term lets, however, you’re safe in knowing that difficult tenants aren’t staying for long.
- You can charge higher rates. Short term lets are always more expensive per day than long-term rentals.
- For tenants, short term lets are usually cheaper than booking a hotel.
- If tenants are staying for an extended period, there could be room for price negotiations.
Disadvantages
- Payments aren’t guaranteed, so there could be significant void periods when business isn’t flowing well. This can be the case for properties located in typical summer holiday spots. It will also mean that you’ll be liable to pay for extras such as internet and other bills.
- Management is more complicated since you’ll be handling multiple guests instead of signing with just one over a longer period of time.
- Maintenance costs are also higher since you’ll be dealing with a constant turnover of guests, increasing wear and tear.
- 90-day rule London – New Government regulations state that properties in London are only authorised to be short let for up to 90 days a year. If the accumulated number of short let days surpasses that, you’ll need to get special permission or rent the property for periods of more than 90 days.
Companies that offer short term lets in London and beyond
You should ensure that you notify the estate agent or service provider that you’re seeking a short term tenancy. Not all companies and landlords offer this service, so going on viewings without knowing whether it’s an option could be a waste of time. Here’s a list of companies in London and the UK that offer short term lets.
Foxtons
Foxtons is a traditional estate agent that only operates within Greater London. The company’s short term lets service caters for those looking for accommodation for a couple of days to a few months. The company typically includes bills with the monthly cost and provides properties furnished to a high standard.
Marsh & Parsons
Like Foxtons, Marsh & Parsons is a London traditional estate agent. The company’s short term lets offer accommodation from four weeks up to six months. It also provides a corporate relocation service where it helps business clients rent and research areas before buying a property.
Oasis Living
Oasis Living is a market-disrupting proptech company that aims to simplify and improve the lettings experience in London. Our company offers a flexible booking service that allows you to rent accommodation for how long it suits your needs. Unlike a traditional estate agent, the process is entirely online and won’t cost as much in fees.
MagicStay
MagicStay is an accommodation portal that finds you short term lets in any city. The company provides tailored solutions for different types of travellers, including holidaymakers and professionals. So, if you’re looking beyond London, this is a fantastic option that could save you money instead of booking a hotel.
Hamptons
Hamptons is a traditional estate agency with a long history. Unlike the previous two agencies, though, it offers short term lets across the UK. The company handles the entire process on your behalf, including inventory management and searching for the right property.
Airbnb
Perhaps the most famous provider of short term lets is Airbnb. The company is responsible for revolutionising the market and popularising the rental of short term accommodation instead of booking hotels. Regardless of the location, Airbnb provides a wide selection of properties, each with its own selling point. If you’re looking for variety you will probably find what you’re looking for at Airbnb.
Savills
Like Hamptons, Savills has a long history of providing housing in the UK. The company caters for all clients seeking temporary accommodation, from corporate to holidaymakers. The company offers short term lets across the country, typically including bills, internet, and cleaning services. Note that it only provides short term lets in London, Cambridge, Wilmslow, and the home counties.
Home to go
A short lets property search engine that matches clients with holiday homes in the UK, France, and Spain. The company’s services are mainly tailored for holidaymakers, and as such, there’s a wide selection of property types. You can choose from castles, farmhouses, or camping sites. The company’s site provides a customisable search engine that enables you to find precisely what you want without having to go through an estate agent.
Mulberry Cottages
Mulberry Cottages is a unique short lets provider in the UK, in that it only advertises cottages. If you’re looking for a country getaway, the company will provide you with cottages of all sizes across multiple locations, including seaside and forest.
Vrbo
Vrbo is another fantastic property search engine that provides holiday short lets across the UK. The company offers a wide selection of housing types and locations.
Rightmove
Rightmove is one of the UK’s most popular property search engines. Many don’t know that estate agencies and proptech companies also advertise short-term lets on the platform. Before deciding on a property, be sure to check what company is advertising the unit, as you might prefer an online approach as opposed to a traditional estate agency model.
HolidayLettings
Like Airbnb, HolidayLettings will showcase temporary accommodation anywhere in the world. They also have a useful platform that allows you to filter properties depending on your particular requirements. As the company name suggests, HolidayLettings mainly caters to holidaymakers, but you can also use it if you’re in between properties and need temporary accommodation.
Chestertons
Chestertons is another traditional estate agency in London with plenty of history and experience in offering properties across the city. It operates under a standard model where you’ll need to book viewings and speak to an estate agent. If you don’t have time to search for properties, you can leave your requirements with Chestertons, and they’ll put together a list of properties for you to see.
Should you opt for short term lets?
Whether you need a short term let or not will depend on your situation. If you’re relocating due to professional reasons, many companies will cover your relocation package. Typically, you’ll be put into short term accommodation until you find an area that you like.
Moving somewhere new
You could also opt for a short term let if you’re considering moving to a new city or area and would first like to try it. Although short term lets are generally more expensive than long term, you could save yourself money by confirming that you enjoy the area before committing to a long term contract.
Going on holiday
If you’re going on holiday for a considerable amount of time, you should also consider a short term let since you’ll have access to amenities that will enable you to cook from home and keep costs down.
In between properties
If you’ve recently sold your home, you can opt for a short term let whilst you wait to move into your new property. It could also be the case that you’re planning to do renovation works that will make your current residence uninhabitable.
If you’re interested in a short term let, regardless of the reason, you should approach one of the companies we’ve mentioned or any other provider offering short term lets and discuss your requirements. Note that short term lets will be more expensive but typically include bills, internet costs, and cleaning services.
Can you short term let if you have a buy-to-let mortgage?
You should be able to short term rent your property if you have a buy-to-let mortgage, but be sure that you can cover the monthly payments if you go through a significant void period. On the other hand, if you have a residential mortgage, your lender will likely decline your request to let out the property short term. Residential mortgages aren’t designed for renting out the property, so you’d have to switch your mortgage to a buy-to-let.
Generally, if you’re moving away for a few years and intend to come back to the property in the future, most lenders will give you’ consent to let’. However, if you’re only moving down the road and plan to let your property short term, they’ll likely decline. To make sure, you should discuss your options with your lender and get professional advice.
What are the regulations on short term lets?
If you’re considering becoming a short term lets landlord, there are certain factors you need to consider before making a decision.
- If you plan to sublet part of your property, you must notify the local council. Additionally, if you have a mortgage, you’ll also have to let your lender know.
- As a short term lets landlord, you’re still liable to cover bills, so ensure that the price paid by clients can help cover monthly costs. This is mainly why short term lets are more expensive.
- The property must meet fire safety regulations. You also need to take measures regarding fire doors and other safety equipment depending on how many people you’ll be letting the property to. If you’re unsure, get in touch with your local council and discuss your requirements.
- You should also ensure that you are up to date with the regulations in the area of the UK you’re based-in. For example, Scotland has recently updated its short term lets laws, whilst places like London also have their own regulations.
Hire a property management company
Managing a short term let isn’t easy. It requires a lot more effort than a long term rental since you’ll be handling many tenants over the same period. So, if you don’t have time to handle the admin and work required, it’s essential that you delegate the work to a property management company. Preferably one that has experience providing short term let services.
Benefits of a property management company:
- They’ll help you stay up to date with the latest laws and regulations. If you aren’t an experienced landlord, it can be easy to overlook specific requirements.
- They’ll handle rent collection on your behalf and are better trained to handle missing payments.
- They can save you money on repairs and maintenance with their in-house team.
- They’ll do all the communication with tenants, saving you time and allowing you to focus on other work.
- Especially for short term lets, a property management company will be better equipped to handle a significant turnover of tenants.
Typically, property managers will take between 5% to 15% of rent payments to cover the cost of services. Before deciding on a company, ensure that they cater for short term lets.
At Oasis, we make the process easy for you. Get in touch today for more info on our short-term let property management services.
