All You Need To Know About Short-Term Lets: A Guide for Landlords

With opportunities for high yields and flexible rental agreements, it’s no surprise that short-term lets are an increasingly popular choice for UK landlords. While they won’t be right for everyone, short-term lets can provide significant benefits to landlords and tenants alike.

If you’re considering renting your property on a short-term basis, here’s everything you need to know to get started. We’ll explain who uses short-term lets, important legal obligations to be aware of, as well as the best websites for advertising your property.

But first thing first, what is classed as a short-term let?

What are short-term lets?

A short-term let refers to any tenancy agreement under 6 months.

Due to the short timeframe, utilities, internet and television are normally included in the rent. These properties also tend to be let on a furnished basis, but again, this isn’t always the case.

When we’re talking about short-term lets, we don’t mean holiday rentals — which could be let on a daily, weekly or monthly basis. 

While holiday letting can be a great way to get into the short-term rental market (testing the waters and ironing out any issues), it’s an entirely different proposition from short-term tenancy agreements.

If you’re renting your property for longer than 6 months (and up to a year), this is usually referred to as a “medium-term rental”. And anything over a year is classed as a “standard” long-term let.

What kinds of tenants use short-term lets?

So, we’ve covered how long is a short-term let. But what kind of tenants use short-term rental agreements, and what are the advantages for landlords?

There are loads of reasons why someone might look for a short-term rent (as opposed to a tenancy agreement lasting a year or more). For instance, someone might be in the area for a few months due to work or family commitments. Another person might need a stopgap while they’re waiting for a property purchase to go through, or somewhere to stay while major building work is taking place on their home.

Short-term lets are also great options for people keen to explore the country, try out a new town or city before a big move, or when they’re simply not ready to make any long-term commitments.

How do short-term lets help landlords?

So, it’s clear the flexibility of short-term lets offers plenty of benefits to tenants. Now let’s take a look at the advantages for landlords.

At first glance, you might think short-term rent agreements are a lot of hassle. After all, there’s more turnover of tenants — with all the paperwork, cleaning and deposit returns that go along with this.

However, this flexibility works for both landlords and tenants.

If you’re a landlord who’s thinking about selling your property, you won’t want a tenancy agreement lasting a year or more. Of course, you could leave your property empty, but this runs the risk of issues arising with the building (such as break-ins or pipes freezing in winter) as well as the obvious lost rental income.

The answer? Short-term lets!

Short-term rentals also let landlords test the current property market. If you’re unsure of your financial situation (for instance, whether rental income will outweigh property maintenance and mortgage costs), then a short-term let is a great way to start renting without major commitments.

Especially if you live in a large city with high rental demand (somewhere like Manchester or Birmingham), chances are you won’t have any difficulty finding reliable short-term tenants to choose from.

What is the 90-day short-let rule?

While large cities are great locations for short-term rentals, there are special rules to be aware of in London.

The “90-day short let rule” prevents London landlords from renting out their properties on a short-term basis for more than three months (or 90 days) a year. While the name comes from  Airbnb limits introduced in 2017, this law actually comes from the 2015 Deregulation Act — which applies to the Greater London area.

If you want to rent your property for more than 90 days as a short-term let, you’ll probably have to apply for what’s known as “Material Change of Use” (i.e. a change in planning permission) from your local authority. Failure to do so could result in fines of up to £20,000.

These rules are intended to stop short-term rentals from being used all year round.

While it certainly isn’t the case for all landlords and short-term tenants, some short-term lets can pose a disruption to local communities. With shorter tenancies, there are fears tenants can be less mindful of disruption to neighbours, with issues surrounding noise, refuse and property maintenance.

As well as London, Edinburgh City Council also introduced similar legislation (on 5 September 2022). Their “short-term lets control area” covers the whole local authority area. This means any property in the city (that isn’t an owner’s primary residence) needs planning permission for use as a short-term let. The only exception is if the property has operated as a short-term let for at least the previous 10 years.

Can you rent for 3 months in the UK?

Now, this is a tricky one.

Yes, hypothetically, you can find a short-term property letting for 3 months in the UK.

An Assured Shorthold Tenancy (AST) can legally last for any time period. Despite this, tenants have a legal right to stay in a property for at least 6 months. This is regardless of whether the AST specifies a shorter timeframe.

An Assured Shorthold Tenancy is one of the most common forms of tenancy agreement in the UK, for both private landlords and letting agencies. They can either be fixed term (normally for 6 or 12 months) or periodic (i.e. rolling on a weekly or monthly basis).

As UK government guidance states, a landlord “must allow you to stay in the property for a minimum of 6 months.” This is the case even if the AST specifies a time period of 3 months (or less). Government guidance further states that tenants can choose tenancies that roll over on a weekly or monthly basis. Even though these tenancies have no fixed end dates, the landlord must still let tenants stay in the property for at least 6 months.

As a result, it’s not hard to see why most estate agents and landlords use 6 months as the minimum length of time on a short-term tenancy agreement. It’s a common misconception that ASTs have to be 6 months, though.

Why is 6 months the normal minimum rental period?

Even though it’s legally possible to rent for 3 months in the UK, there are downsides for landlords, as we’ve seen above.

With anything less than 6 months, landlords can’t get a court order if they need to evict tenants. To do this, a landlord needs an official court-provided “possession order” giving a date the tenant has to leave (and the landlord can regain possession of the property). 

This means that if (for example), your tenant stops paying rent after 2 months, you could face a wait of at least another 4 months before starting legal proceedings.

One way of tackling this is to ask for 3 months’ rental payments up front, alongside a large rental deposit covering the remaining 3 months. It’s not ideal, though, and leaves landlords open to legal challenges (for instance, if a tenant feels they’ve been unfairly evicted).

While specialist landlord insurance is there to protect you against any lost rental income or legal action, these situations are best avoided in the first place.

What is the best site for short-term rentals?

If you’ve decided to rent your property on a short-term basis, the good news is you have plenty of options.

Most estate agents will help you rent your property for a period of 6 months. If you want to rent your property for a shorter time than this, OpenRent is one of the best-known (and most widely used) online letting agents for short-term lets.

To get an idea of short-term rentals in your area, you can filter for short-term lets on Rightmove. With a quick scan through search results, you’ll see which local estate agents help landlords secure short-term tenants.

In addition, the luxury property market is particularly well-suited to short-term rentals. As such, you can find dedicated short-term lets from well-respected estate agents such as Savills and Hamptons.

Of course, while we’ve focused on Assured Shorthold Tenancy Agreements, if you fancy dipping your toes into the holiday market, there are even more choices for short-term rentals. Airbnb, Vrbo and even the National Trust are just some of your short-term options.

Are you a landlord wanting to protect your property and your investments? With A-Plan’s specialist Landlord insurance, we’ll help you find cover that’s right for your needs at our best price. Fill in our short form and get a quote today.

Also read:
What is a rentalpreneur? 
A guide for buy-to-let landlords
What Landlord’s Insurance Do I need? (In-Depth Guide)