For UK property investors, the short term lets vs long term lets debate is one of the most talked about strategies of the last few years, and the central question is almost always the same: which makes more money? You have bought, or you are about to buy, an investment property. Now you need to decide how to run it. Do you find a long term tenant and collect a reliable monthly rent, or do you list it as a short term let, charge by the night, and aim for significantly higher returns?
The honest answer is that it depends on the property, the location, and how the investment is set up. But for investors in the right developments, in the right cities, with the right management in place, short term lets consistently outperform long term lets on yield. Often by a significant margin.
This article walks you through both strategies in detail: the numbers, the practicalities, the regulations, and what good management actually looks like so you can make an informed decision before you commit.
Let’s start with a real example.
A one-bedroom apartment at One Trafford Edge in Manchester would typically achieve around £1,200 per month on a standard long-term let. That is a reasonable return and broadly in line with Manchester city centre market rates for new-build stock.
The same apartment, operated as a short-term let at £120 per night with an 80% occupancy rate, generates approximately £2,928 per month. That is more than double the long-term let income from the same asset.
At that occupancy level across twelve months, the annual gross income from short-term letting comes in at around £35,136 compared to £14,400 from a long-term tenancy. The gap between short-term lets vs long-term lets on raw income alone is substantial, and it is why short-term letting has become an increasingly central part of serious property investment strategies in the UK.
According to data from Savills, short-term rental yields in major UK cities are consistently running 40 to 60 percent above equivalent long-term let returns in well-located urban developments. AirDNA, which tracks short-term rental performance data across the UK, reports average occupancy rates in Manchester city centre of between 75 and 85 percent, supporting the projections above.
| Metric | Long-Term Let | Short-Term Let |
|---|---|---|
| Rate | £1,200 pcm | £120 per night |
| Occupancy | 100% (tenanted) | 80% |
| Monthly Income | £1,200 | £2,928 |
| Annual Gross Income | £14,400 | £35,136 |
| Gross Yield (est.) | ~7.5% | ~16% |
Based on a one-bedroom apartment at One Trafford Edge, Manchester. Short-term let figures assume 80% occupancy at £120 per night. All figures are projections and not guaranteed.
Before we go further, it is worth being clear. Long-term letting is not a poor strategy. It is a different one, and for some investors and some properties, it is the right one.
A long-term tenancy gives you predictable, stable income every month. You are not managing nightly bookings, seasonal fluctuations or platform fees. Your void risk is lower in the sense that once a good tenant is in place, you can expect a consistent income stream with minimal day-to-day involvement.
For investors who want genuine passivity, or who are investing in locations where short-term letting is not approved or does not have strong tourist or corporate demand, long-term letting makes sound commercial sense.
Several of the developments in the Providence Wealth portfolio are structured specifically for long-term letting, with yields running between 5.75% and 7.9% gross. For London-based developments like The Moxon in High Barnet and Claremont Quarter in Cricklewood, the investment case is built on long-term professional tenant demand and capital growth rather than nightly income. That is a credible and well-supported strategy.
When comparing short-term lets vs long-term lets, the key point is that long-term letting works best when the location and the development are suited to it, and when the investor understands that the return profile is different from short-term letting rather than inferior to it.
For the right property in the right location, short-term letting offers a structurally higher return than long-term letting. The reason is straightforward: you are charging a premium for flexibility. Guests pay more per night than tenants pay per day because they value the ability to book for two nights, a week, or a month without a long-term commitment.
In practice, this means that even accounting for higher running costs, a well-run short-term let in a strong location will almost always generate more net income than the same property on a long-term tenancy.
Aire Gardens in Leeds projects a gross short-term let yield of 14.67%. Abbey Row in Liverpool projects 14%. Forum House in St Albans projects 14%. One Trafford Edge projects 16%. These are figures that long-term letting at any realistic rent level cannot match in those locations.
The short-term let premium is driven by several factors working together: strong corporate and leisure demand in city centre locations, event-driven pricing spikes, seasonal occupancy peaks, and the flexibility premium guests pay for serviced accommodation compared to a standard rental. This is the core reason why, for investment purposes, short-term lets vs long-term lets is not a close comparison in the right markets.
The Renters Rights Act, which came into force in May 2026, has significantly changed the landscape for long-term landlords in England. The abolition of fixed-term tenancies and Section 21 no-fault evictions has made it considerably more difficult for landlords to regain possession of their properties when needed.
For investors operating in the long-term rental market, this represents a meaningful increase in risk and complexity. Short-term letting sits outside the scope of the Renters Rights Act entirely. Guests on short-term lets are not assured shorthold tenants and do not benefit from the new protections. This means short-term letting offers investors a level of operational flexibility and control that long-term letting no longer provides.
This regulatory shift has been widely reported, with Propertymark and NRLA both noting increased investor interest in alternatives to traditional buy-to-let as a direct result of the legislation.
This is where a significant number of short-term let strategies fall apart before they begin.
Many new-build developments, particularly those with leasehold structures, include clauses in the lease that prohibit short-term letting. Some developments have building management companies that enforce restrictions on platforms like Airbnb and Booking.com. Others are located in local authority areas that require planning permission or registration for short-term lets that the developer has not obtained.
Purchasing a property with the intention of operating it as a short-term let, only to discover that the lease or local authority prohibits it, is a costly and difficult situation to reverse.
Every development in the Providence Wealth portfolio that is marketed as short-term let approved carries documented developer approval and the relevant lease provisions in place before it is presented to investors. This is not an assumption or a verbal assurance. The approval documentation exists and is verifiable. If we say a development is short-let approved, it is.
Before committing to any short-term let strategy on any property, whether through Providence Wealth or otherwise, verify the following: the lease permits short-term letting explicitly, the building’s management company has no restrictions in place, and the local authority does not require separate planning permission or registration for short-term lets in that area. In Scotland, a short-term let licence is now mandatory. In England, a national registration scheme is in development.
The most common misconception about short-term letting is that it is complicated or time-consuming. It does not have to be either, but only if you have the right management in place from the start.
A professional short-term let management company handles everything: guest communications, check-in and check-out, cleaning between stays, maintenance coordination, linen and toiletries, platform listings, and guest reviews. For an investor, the day-to-day operation becomes entirely hands-off. Your involvement is receiving the monthly income statement.
The single most important differentiator between a good short-term let management company and an average one is dynamic pricing. This is the practice of adjusting nightly rates in real time based on demand, local events, seasonality, and competitor pricing. A management company using dynamic pricing software such as PriceLabs or Beyond will consistently outperform a flat-rate pricing strategy by 20 to 35 percent on annual revenue according to industry data.
To illustrate: a one-bedroom apartment in Manchester will command a very different rate on a standard Tuesday in February than it will the weekend of a major concert at the Co-op Live arena or a Manchester City European fixture. A flat rate of £120 per night captures neither the downside of the quiet Tuesday nor the upside of the event weekend. Dynamic pricing does both.
Providence Wealth works with localised short-term let management partners in each of the markets we operate in. We introduce investors to vetted management companies with a track record in the specific development or city, so the management relationship is in place before the property completes. This is part of the service we provide, not an afterthought.
For more on how the investment process works from reservation through to completion and beyond, read our guide to off-plan property investment in the UK.
Short-term letting does carry higher running costs than long-term letting, and any honest projection needs to account for them in full. This is one of the most important practical considerations when weighing up short-term lets vs long-term lets for investment purposes.
The main additional costs compared to long-term letting are:
Platform fees: Airbnb, Booking.com and similar platforms typically charge between 3 and 15 percent of booking revenue depending on the model used.
Management fees: Professional short-term let management in the UK typically runs between 15 and 25 percent of gross revenue depending on the level of service and the market.
Utility bills: Unlike long-term lets where tenants pay their own bills, short-term let operators cover electricity, gas, water, broadband and council tax. These need to be built into the cost model.
Cleaning and laundry: Professional cleaning between every stay, plus linen and towel replacement cycles, is an ongoing cost that adds up across a year.
Furnishing and maintenance: Short-term lets need to be furnished to a higher standard than long-term lets, and furniture and fixtures will turn over more frequently with heavier guest use.
The reason short-term letting still outperforms long-term letting despite these higher costs is that the gross revenue gap is wide enough to absorb them and still deliver a better net return in the right locations.
Every Providence Wealth investor in a short-term let approved development receives a full cost-inclusive forecast before committing. This shows gross income, all running costs, net income, and net yield, so the return you see is the return you can actually expect to receive, not a top-line figure that ignores the cost base.
One aspect of short-term letting that rarely appears in financial projections but genuinely matters to investors is personal use.
Unlike a long-term tenancy, where the property is legally occupied by a tenant and unavailable to the owner for the duration, a short-term let can be blocked out for personal use at any point. An investor who owns a short-let approved apartment in Manchester, Liverpool or Leeds can use the property themselves, or make it available to family and friends, during periods where it would otherwise be vacant.
This is not the primary reason to choose short-term letting over long-term letting, but for investors who value the optionality of accessing their own asset when they want to, it is a meaningful practical benefit that long-term letting simply does not offer.
When it comes to short-term lets vs long-term lets for investment, the answer is not universal.
Short-term letting is the stronger income strategy for investors purchasing in city centre locations with strong tourist, corporate and event-driven demand, where the development carries genuine short-let approval and a credible management solution is in place.
Long-term letting is the stronger strategy for investors who prioritise simplicity and predictability, who are investing in locations where short-term demand is lower or approval is not in place, or who are targeting capital growth in established markets like London where the long-term tenant demand and value appreciation story is the primary investment case.
What we would always caution against is making the decision based on the gross yield figure alone without understanding the cost structure, the management requirement, and whether the development is genuinely set up for the strategy you intend to pursue.
To read more about how we select developments and what we look for in a strong investment location, take a look at our guide to regeneration zone property investment and our overview of how to build a property portfolio.
If you would like to understand how this works in practice across any of the current Providence Wealth developments, or if you want to see a full cost-inclusive forecast for a specific opportunity, book a discovery call using the button below and we will walk you through it in detail.
Further Reading
How Off-Plan Property Investment Works: A Complete Investor Guide
Regeneration Zone Property Investment: How Smart Investors Build Serious Wealth
How to Build a Property Portfolio: 5 Steps to Long-Term Wealth
Can You Get a Mortgage on an Off-Plan Property? A Buy-to-Let Investor’s Guide
Alternative Investments UK: What Every Serious Investor Should Know
