The UK private rental sector is undergoing its most significant reform in decades. The Renters’ Rights Bill (expected to come into force in stages from 2025–2026) will fundamentally change how long-term residential tenancies operate in England.
While the legislation is designed to strengthen tenant protections and improve standards, it has also prompted many landlords — particularly in London — to reassess their investment strategies. For a growing number, short-term letting is emerging as an attractive alternative.
What Is the Renters’ Rights Bill?
The Renters’ Rights Bill introduces sweeping changes to the private rented sector, replacing the existing Assured Shorthold Tenancy (AST) framework with a more tenant-focused system. Key proposals include:
Abolition of Section 21 “No-Fault” Evictions
Landlords will no longer be able to regain possession of a property without a specific legal reason. Instead, they must rely on defined grounds for possession, such as selling the property or serious tenant breach.
End of Fixed-Term Tenancies
All tenancies will move to a single system of open-ended periodic tenancies. This removes the certainty that fixed terms previously gave landlords, particularly those who value flexibility or may need to sell or repurpose a property.
Restrictions on Rent Increases
Rent increases will be limited to once per year and must follow a formal process. Tenants will also have stronger rights to challenge rent rises they believe exceed market levels.
Increased Compliance and Enforcement
The Bill strengthens property standards, introduces a new landlord register, and increases enforcement powers for local authorities. While intended to improve housing quality, this also adds administrative and compliance costs for landlords.
Why the Bill Is Changing Landlord Behaviour in London
London’s rental market is uniquely sensitive to regulatory change. High property values, rising mortgage costs, and tighter margins mean that reduced flexibility can have a disproportionate impact.
Many landlords are concerned about:
- Longer and more uncertain possession timelines
- Reduced control over how and when properties can be used
- Increased legal and compliance obligations
- Higher risk if a tenancy does not work out
For landlords who rely on flexibility — such as those with former homes, pied-à-terres, or investment properties — the new framework represents a meaningful shift in risk.
The Appeal of Short-Term Letting as an Alternative
As a result, more landlords are exploring short-term and serviced accommodation models, particularly in high-demand London areas.
Greater Flexibility
Short-term lets do not fall under the same tenancy framework as long-term residential lettings. Owners retain control over availability, pricing, and use of the property.
Potential for Higher Returns
In well-located areas, professionally managed short-term rentals can outperform traditional long-term rents, especially when demand from tourists, corporate travellers, and relocations is strong.
Reduced Exposure to Long-Term Tenant Risk
Short-term bookings avoid the challenges associated with long possession proceedings or rent disputes, offering clearer cash-flow visibility.
Alignment With Lifestyle and Investment Needs
Many landlords prefer the ability to block dates for personal use, refurbish between stays, or exit the market quickly if circumstances change.
Important Considerations for London Landlords
Short-term letting is not without regulation. In London, landlords must comply with:
- The 90-night annual limit for short-term lets (unless planning consent is obtained)
- Building lease terms and freeholder restrictions
- Fire safety, insurance, and local authority requirements
Professional management and compliance checks are essential to operate legally and sustainably.
A Market in Transition
The Renters’ Rights Bill represents a major rebalancing of the private rental sector in favour of tenants. While the intent is clear and widely supported, the practical outcome is that many landlords are rethinking whether traditional long-term letting still meets their needs.
In London, where demand for flexible accommodation remains strong, short-term letting is increasingly viewed as a strategic response rather than a niche alternative. As the new legislation is implemented, the shift away from conventional buy-to-let models is likely to continue.
If you are a landlord and you're considering converting your long-term rental into a short-term one - get in touch with us for a financial projection of the bottom line you can expect at the end of each month.
