The latest property market analysis by London lettings and estate agent, Benham and Reeves, has revealed how short-term lets can boost rental incomes for landlords by as much as 78% across the nation’s major cities.
Benham and Reeves analysed the current average asking rents for both short and long term lets across eight major cities. They found that on average, short-term lets commanded £1,677 per month, 41% more than the average of £1,193 for long term rentals.
However, in some cities, short-term rentals provided a far higher uplift in monthly rental values.
In Glasgow, the average short-term rental currently commands £1,526 per month versus just £855 for a long term let – a 78% boost in rental incomes.
London is home to the second highest short-term rental price premium. At £3,204, a short-term let in the capital not only commands the highest monthly rental values of all cities, but it also comes in 74% higher than the average rent for a long-term let (£1,840).
Edinburgh (66%) and Liverpool (58%) are also home to short let rental values more than 50% higher than the average paid for a longer term rental property.
However, the research by Benham and Reeves also shows that short-term lets don’t necessarily guarantee a higher rental return.
In both Birmingham and Newcastle, the average monthly short let rental value comes in at just one per cent higher than the average for a long term let in each city.
Director of Benham and Reeves, Marc von Grundherr, commented:
“It’s fair to say that many landlords across the nation will be feeling the strain from a number of legislative changes designed to dent profit margins and opting for the path of short-term lettings can be a great way of negating this decline.
It certainly won’t be right for every landlord and it requires a rental property in a high demand area, with a high turnover of short to medium term tenants. It can, however, be very lucrative in major cities, in particular, where professional tenants come and go and many foreign tenants look for a short-term solution when first entering the market before laying longer term roots.
Of course, there is a heightened risk of void periods as a result but with the right management agent in place, these should be few and far between while the rental price premiums secured should also be far more favourable.”
Table shows the average rental price per month for both long and short-term lets for rental properties currently on the market and the difference between the two
Ave rental price pcm – general
Ave rental price pcm – short lets
Difference short let vs general £
Difference short let vs general %
Sourced from Zoopla – 1,050 current listings for both short and long term rentals
About the Author
Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 19 prominently located branches and 11 international offices.