Recent data reveals a shift from traditional long-term rentals to short-term lets in the capital. This change reflects landlords’ evolving strategies to optimize returns from their property investments.

The Emergence of Short-Term Lets

Propalt, a property analysis firm, has uncovered that approximately 20% of short-term lets in London were previously long-term rentals. This finding stems from their Landlord Portfolio Analysis tool, which scrutinized over 2,800 short-term let listings across all London boroughs. Among these, 586 properties had transitioned from long-term rentals managed by letting agents to short-term rental properties.

Profile of the Changing Market

The data further indicates a significant presence of portfolio landlords – those owning multiple properties – in the short-term rental market. Nearly 30% of these listings come from landlords with extensive property portfolios, a figure almost triple the national average. These landlords currently manage over 10,000 long-term rentals in and around London.

Insights from Industry Experts

Perspectives on the Market Shift

Kieran Slinger, co-founder of Propalt, highlights the growing trend towards short-term letting in London. This trend is not only prevalent in the capital but also in other areas with high tourist footfall. Slinger points out the rapid departure of accidental landlords from the market and the inclination of portfolio landlords towards alternative models to maximize returns.

Analyzing the Trend’s Momentum

YuJie Gong, Head of Data at Propalt, observes the remarkable speed and scale at which landlords are switching to short-term lets. The analysis shows a pattern where long-term rentals are often converted to short-term listings within 60 days of their lease ending. Gong suggests that unless long-term rentals offer comparable returns, this trend is likely to continue and intensify.