Serviced Lets Promised High Income, But Is the Model Still Working?
A few years ago, landlords flooded Airbnb and Booking.com with short-term lets, chasing returns nearly double that of long-term rentals. But in 2024, the picture has changed.
Increased regulations, oversaturation in major cities, and changing travel habits have forced landlords to rethink whether serviced accommodation is really the goldmine it once was — or just a high-maintenance gamble.
What the Numbers Say: Serviced vs. Long-Term Letting
According to AirDNA’s UK Market Review (2024), average occupancy for short-term rentals in UK cities has dropped to 57%, down from 67% in 2022. Meanwhile, average daily rates (ADR) have remained largely flat, creating shrinking margins for landlords.
By comparison, long-term rents are up 8.3% year-on-year across the UK, and over 12% in cities like London, Birmingham, and Manchester [source: Zoopla Q1 2024 Rental Index]. That’s a major shift.
Key Stats:
Average monthly income (net):
Serviced accommodation in Manchester: £1,450 (after costs, based on 57% occupancy)
Long-term 2-bed let: £1,300 (with minimal ongoing expenses)
Time to manage (weekly):
Serviced: 6–10 hours
Long-term: Less than 1 hour (with a good agent)
Serviced accommodation can still outperform, but only in high-tourism zones with premium-level presentation — and only if you’re willing to stay on top of it.
The Hidden Costs of Serviced Accommodation
1. High Turnover, High Hassle
Cleaning, linen changes, guest messages, emergency calls at 10pm — all of it falls on you (or costs more to outsource).
2. Platform Fees and VAT Traps
Booking.com, Airbnb, and channel managers take their cut — often 15%–20%. And if your turnover exceeds £85,000, you’ll need to register for VAT, which can wipe out your margins unless you structure things properly.
3. Local Council Restrictions
Short-let restrictions have already come into force in areas like London (90-day rule), Edinburgh, and parts of Greater Manchester — and more councils are following. You may need planning permission or face fines [source: Gov.uk – Short-Term Let Regulation Review, 2024].
Is Standard Letting the Smarter Move Right Now?
Many landlords are quietly switching back to long-term lets, or mixing models with mid-term corporate or insurance lets, which provide stability and higher yields without the nightly churn.
Why it makes sense now:
Rents are at record highs in many cities
Demand is strong and consistent (over 300,000 renters are waiting for homes according to ONS housing data)
Maintenance and management costs are significantly lower
New tax rules and energy requirements make simplicity more profitable
StoneGrove’s View: Strategy First, Not Hype
We don’t believe in “one-size-fits-all” letting. We help landlords identify the most profitable and practical model for their property based on location, size, tenant type, and current market data.
Whether that’s serviced accommodation, long-term tenancy, or hybrid models like short stays during peak seasons and long lets during slower months — we build a strategy, not guesswork.
Want to Know What’s Best for Your Property in 2024?
Get a free property income forecast from our team at StoneGrove. We’ll compare your property’s earning potential across serviced, short, and long-term letting — using real data, not hype.
👉 [Request My Free Forecast] or give us a call.
