Airbnb vs Long-Term Rental in London After the Renters’ Rights Act

For London landlords deciding how to let a property, the choice often comes down to a standard long-term tenancy or a short-term/Airbnb-style let. Both are legitimate strategies — the right one depends on the property and what the landlord wants from it.

What Changed for London Landlords on 1 May 2026

The Renters’ Rights Act received Royal Assent on 27 October 2025, and its main tenancy changes in England took effect on 1 May 2026. For a landlord weighing up a long-term let against Airbnb, these are the changes that matter most:

• Section 21 has gone. Landlords can no longer end a tenancy with a “no-fault” eviction notice. To get a property back you now need a specific legal ground, such as selling or moving in, and notice periods apply.
• Tenancies are periodic. Fixed-term assured shorthold tenancies have been replaced by rolling tenancies. Tenants can leave with two months’ notice.
• Rent increases are limited. Rent can be raised once a year through a formal section 13 notice with two months’ notice, and rent review clauses no longer apply.
• Rent in advance is restricted to one month at the start of a tenancy, and landlords must not invite or accept offers above the advertised rent.
• Pets: tenants can ask to keep a pet, and a landlord must not refuse unreasonably.

More measures, including a private landlord database and an ombudsman scheme, are due to follow in later phases.

How the Act Changes the Airbnb vs Long-Term Rental Decision

A long-term let is still the lowest-effort way to let a property. What has changed is control. Once a tenant moves in, it is harder and slower to get the property back, and rent can only rise once a year.

Short-term and holiday lets work differently. Guests book for a set stay, and a genuine holiday let is generally not an assured tenancy, so the new tenancy rules do not apply to it in the same way. You keep control of the calendar and can block dates for your own use or a planned sale. Short lets bring their own rules instead, above all London’s 90-night limit for whole homes. Take legal advice on your own arrangement if you are unsure which rules apply.

That is why some London landlords are now looking again at short lets and serviced accommodation, often combining the two so the property earns all year without breaking the 90-night limit.

Traditional (Long-Term) Tenancy

• Stable, predictable monthly rent
• Lower day-to-day involvement — one tenant, one relationship
• No 90-night limit, but since 1 May 2026 tenancies are rolling, section 21 has ended and rent can only rise once a year
• Less flexibility if the landlord wants to use the property themselves occasionally

Short-Term / Airbnb-Style Letting

• Generally higher gross income potential than an equivalent long-term rent, particularly for well-located properties
• Significantly more operational work: guest management, cleaning between every stay, dynamic pricing
• Subject to specific regulation in London — currently a 90-night annual cap on whole-property short lets without planning permission (see our regulations guide)
• Income varies with demand and seasonality, rather than being fixed

Which Is More Profitable?

Short-term letting can generate higher income than long-term letting for the right property in the right location — but that gap narrows once cleaning, management time, void periods and compliance are accounted for. This is exactly the calculation a management service is built to optimise, since the operational cost of doing it well is spread across many properties rather than falling entirely on one landlord.

Frequently Asked Questions

Does the Renters’ Rights Act apply to Airbnb lets?

The Act’s main changes are aimed at assured tenancies, where someone lives in the property as their home. Genuine holiday and short-term lets are generally not assured tenancies, so they are treated differently. London’s 90-night rule for whole-home short lets still applies.

Can I switch from a long-term tenant to short lets?

Only once the tenancy has ended lawfully. Since section 21 was abolished, that means the tenant gives notice or you use one of the legal possession grounds. Plan the switch around the tenancy, not the other way round.

Is serviced accommodation a middle ground?

For many London properties, yes. Longer stays for corporate guests, contractors and people relocating can fill the nights that short lets cannot use under the 90-night rule. Read how short-term let management works to compare.

Making the Decision

The honest answer depends on your specific property. Get a free income projection comparing what your property could realistically earn as a managed short let, with no obligation.