The Shifting Landscape: What UK Property Managers Need to Know as Landlords Move from Long-Term Rentals to Airbnb

The UK rental market is undergoing a significant transformation. As we move into 2025, a new trend is emerging: landlords are increasingly moving away from long-term rentals and turning towards short-term lets, especially platforms like Airbnb. This shift is having major implications for both property managers and tenants alike. For Airbnb and short-let property managers, understanding the driving forces behind this change—and how to adapt—is crucial for staying competitive and maximising opportunities in a changing market.

The Shift: Why Are Landlords Moving Away from Long-Term Rentals?

A recent report reveals that two-thirds of UK landlords plan to either exit the rental market, reduce their portfolios, or pivot to short-term lets like Airbnb in 2025. But why this shift? Several key factors are driving this change:

1. The Renters’ Rights Bill: This new legislation is giving tenants more power, including stronger protections against eviction. For landlords, this change reduces their flexibility and increases the potential risks associated with long-term tenancies.
2. End of Section 21 Evictions: The government’s decision to end Section 21 evictions—the ability for landlords to evict tenants without cause—is seen as a significant blow to landlords who previously relied on this process to regain control of their properties.
3. Decreased Profitability: Rising costs—such as mortgage payments, maintenance, and insurance—have squeezed profit margins for landlords in the long-term rental sector. In contrast, short-term rentals often provide a more lucrative return on investment, especially in sought-after areas or cities with high tourist demand.

The London Impact: A Major Shift

London is experiencing the most significant impact of this trend. 42% of landlords in the capital are planning to exit the market entirely, as they see better profitability and fewer regulatory headaches in short-term lets. This could lead to a major reduction in the number of long-term rental properties available in London, exacerbating the already serious housing shortage and increasing rental costs for tenants. But for Airbnb and short-let property managers, this could be an opportunity to expand portfolios and tap into a market that’s set to grow.

What Does This Mean for Airbnb and Short-Let Property Managers?

As more landlords look to Airbnb and other short-let platforms for higher returns, property managers will see an influx of new properties to manage. This shift presents both challenges and opportunities. Here’s how short-let property managers can navigate these changes:

Increased Competition: Stand Out in the Crowded Market

With landlords flocking to short-term lets, the competition for guests is expected to rise. Airbnb property managers will need to be proactive in differentiating their properties and services to attract guests. Some strategies to stand out include:

• Enhanced Guest Experience: Offering additional perks such as local guidebooks, personalised check-ins, or curated experiences (e.g., cooking classes, local tours) can create memorable stays and encourage repeat business.
• Unique Property Features: Invest in unique touches that can make your properties stand out—whether it's eco-friendly amenities, luxury decor, or tech-forward solutions like smart home devices. These can attract niche markets looking for something special.

Managing a Growing Portfolio: Scale Without Sacrificing Quality

As more landlords transition to short-term lets, property managers will be required to handle an expanding portfolio. This presents an operational challenge—especially for those used to managing a smaller number of properties. To stay efficient and effective, here are some key strategies:

• Outsource Operations: To avoid burnout and maintain high-quality service, property managers can consider outsourcing key operational tasks. This could include housekeeping, maintenance, guest communication, and even photography. Partnering with trusted service providers can streamline processes and ensure that the properties stay in top condition without overwhelming your in-house team.
• Use Property Management Software: Leveraging property management platforms (like Guesty, Hostfully, or Lodgify) can help you efficiently manage bookings, automate guest communication, track maintenance tasks, and set up dynamic pricing. These tools are designed to save time and improve workflow, making it easier to handle more properties.
• Create a Strong Team: As your portfolio grows, building a reliable team becomes crucial. Consider hiring or outsourcing specific roles, such as guest relations, cleaners, or a maintenance team, so you’re not shouldering all the responsibilities yourself. This will help you scale quickly while ensuring consistency across properties.

Maximising Profitability: Leverage Technology and Smart Pricing

As competition increases, property managers will need to fine-tune their strategies to maximise revenue. One of the best ways to do this is through dynamic pricing.

• AI-Powered Pricing Tools: Software like PriceLabs or Beyond Pricing uses AI and data analytics to adjust your prices based on factors like local events, seasonality, and competitor rates. These tools optimise rates automatically, ensuring you’re always charging the best price for your properties.
• Offer Tailored Packages: To increase profitability, think beyond just renting out the space. Offering extra services like airport transfers, private chef experiences, or event planning can help increase revenue per booking and provide more value to guests.

Staying Ahead of Regulatory Changes

The changing landscape of short-term rentals means property managers must be prepared for evolving regulations. Staying ahead of new legal developments and ensuring compliance will be critical to long-term success. Some actions to take include:

• Stay Informed: Keep a close eye on any new regulations impacting short-term lets. This includes tax changes, licensing requirements, and local zoning laws that may affect your properties. Sign up for updates from industry associations or government sources to stay ahead of the curve.
• Diversify Your Listings: With regulatory changes in some areas, diversifying across multiple platforms such as Airbnb, VRBO, and Booking.com can help spread risk and reduce reliance on any one source of income. It also gives you access to a wider range of guests, improving your occupancy rates.

Targeting Niche Markets: Appeal to the Changing Demographics

With more landlords entering the short-let market, finding niche markets will be essential to maintaining a competitive edge. Consider targeting specific demographics like:

• Remote Workers and Digital Nomads: Offering long-term stays with tailored amenities, such as fast Wi-Fi and home office setups, can appeal to the growing number of remote workers.
• Eco-Conscious Guests: As sustainability becomes increasingly important to travellers, incorporating green initiatives into your properties, such as solar panels, eco-friendly toiletries, or waste-reduction programs, can attract environmentally conscious guests.

Long-Term Prospects: An Evolving Market

While the short-term rental market is currently growing, property managers should also be mindful of the long-term outlook. As landlords move away from long-term rentals, the decrease in housing supply could fuel an increase in rental costs for tenants, potentially making cities like London even less affordable. This may, in turn, impact demand for short-term lets as locals struggle to find affordable housing.

Additionally, if demand for long-term rentals decreases significantly, governments may introduce more regulation to balance the market. Staying on top of industry shifts and legal developments will be key for property managers to remain successful.

Final Thoughts: Embrace the Change, Seize the Opportunity

The move towards short-term lets is undeniable, and Airbnb property managers are well-positioned to capitalise on this trend. The influx of new properties into the short-let market presents unique opportunities to grow and diversify your portfolio. However, with increased competition and the ever-evolving regulatory landscape, the key to success will lie in staying agile, maximising profitability, and always prioritising the guest experience.

In a market in flux, those who can adapt quickly and efficiently will be the ones who thrive. 2025 could be a game-changing year for short-let property managers—but only for those who are ready to seize the opportunities that come with it.