UK short term lets hit 100 million guest nights in 2025. Here’s what that means for property investors — and why lenders are finally catching up with the opportunity.
One hundred million guest nights. In a single year. In the UK. Short term lets.
That’s the figure published by the ONS for 2025, covering short term lets booked through online platforms. To put it another way: people chose to stay in a short term lets property more than 100 million times last year, up 11.5% on 2024. That’s not a trend anymore. That’s a market.
I’ve been financing property for over 30 years – through crashes, corrections, and the odd curveball none of us saw coming. And when I look at where money is moving in the property world right now, serviced accommodation and short term lets are one of the most interesting conversations I’m having.
There was a time when short term lets were essentially “holiday cottage” territory. A farmhouse in the Lake District. A flat in Edinburgh during the Festival. A beach house in Cornwall doing 12 weeks of summer trade and sitting empty the rest of the year.
That picture has changed almost beyond recognition.
Today’s serviced accommodation market spans city-centre corporate lets, boutique stays, aparthotels, and hybrid models that blend short and medium-term tenancies. Some operators run portfolios of 20 or 30 properties. Others use a single well-placed unit to generate returns that would make a traditional buy-to-let landlord’s eyes water.
The ONS data backs this up. August 2025 was the busiest month, with over 14 million guest nights – but January, historically the quietest month, still logged 4.3 million nights and grew 19% year-on-year. This isn’t just summer-holiday seasonality anymore. Demand is running year-round, and the North East saw the sharpest regional rise at 22.2%. This is a national story, not just a coastal one.
Here’s the honest bit. Until relatively recently, lenders didn’t really know what to do with these properties.
Ask a high street bank to mortgage a property that operates as a short term let no assured shorthold tenancy, income that varies month to month, usage that doesn’t fit the standard residential or commercial box — and you’d often get a blank look followed by a polite decline.
I spent nearly 20 years on the banking side before setting up Lime, and I remember the conversations. The problem wasn’t that the lenders thought these properties were bad investments. It was that they didn’t have the underwriting tools to assess them properly. Their systems were built for salary multiples, simple yields and rental income on ASTs. Variable nightly income, platform dependency, occupancy rates – none of that fitted the spreadsheet.
That’s been shifting. Specialist and challenger lenders have been building the expertise and the products to properly assess short term let properties. They’re looking at demonstrated gross income, realistic occupancy figures (not just the owner’s projections), platform performance history, and the location’s viability as a short-term let destination.
It’s more nuanced underwriting, and frankly, it’s more honest – because it reflects what the property actually does.
Some lenders are now actively looking to write more of this business. They understand that a well-run serviced accommodation property in the right location, with solid occupancy records, is a fundamentally sound asset. The income, when you average it out across a year, can significantly outperform a standard AST – and they’re starting to price that in.
My experience financing these properties tells me a few things about where the real opportunities and the real pitfalls lie.
Income verification matters enormously. A client comes to me saying their Airbnb property earns £4,000 a month. That might be true in July and August. But what does January look like? What’s the average occupancy rate across 12 months?
Lenders who understand this market will want to see platform analytics, booking histories, and ideally two years of accounts. The clients who’ve kept clean records are in a very different position to those who’ve been running things informally.
The property type affects your options. A freehold house operating as a short term let has more lender options than a leasehold flat – particularly if the lease restricts short term lets, which many do. I’ve seen deals fall over at the last minute because someone hadn’t read their lease carefully enough.
That’s a conversation to have at the start, not after you’ve agreed a price. It is also where a good solicitor pays for themselves.
Exit strategy matters as much as entry. One thing I try to get clients to think about early is what happens if the short term let model stops working – perhaps because of local regulation, or the platform changes its algorithm, or the area simply becomes less popular. Can this property revert to a standard tenancy or be sold as a residential property?
Lenders think about this more than investors tend to, the tip – think like a lender.
Interest rates and product availability are improving. Eighteen months ago, the choice of products for short term let properties was thin. Rates were often a full percentage point or more above equivalent buy-to-let rates, if you could get a product at all.
The market has moved. There are more lenders, more products, and more competitive pricing than there were even a year ago. It’s not quite buy-to-let in terms of choice – but it’s getting there. Remember that if your return is higher then the lender financing the deal will think their return should be too, it’s not unfair when you think about it commercially.
Propertymark’s chief executive has been vocal about the impact of short term lets on private rental supply, and it’s a fair point. Every property that moves from long-term to short-term use is one fewer home available to rent. Local authorities are increasingly looking at powers to regulate the sector, and the previous government’s short term let registration scheme – though not yet fully implemented – signals a direction of travel.
That’s worth watching. Not because I think the short term let market is about to be regulated out of existence – I don’t – but because operators and investors who take this seriously will be better placed as the regulatory landscape evolves.
The properties that are well-run, compliantly operated, and properly documented will hold their value and their lender appetite. The ones that aren’t will struggle.
If you’re already operating in the short term let space and looking to refinance or expand, the market is genuinely more accessible than it was. The key is presenting the deal properly – clean income records, clear property information, and a realistic view of what the property earns across the whole year, not just the busy months.
Add into that the consideration of alternative use and you start to build a convincing case for why a mortgage lender will want to finance your short term let or serviced accommodation property.
If you’re considering buying into this space for the first time, talk to a broker before you make an offer (ahem, that’s us).
The financing landscape for short term lets is not the same as standard buy-to-let, and the nuances matter – lease terms, lender appetite by location, income verification requirements.
Getting the right advice at the start saves a lot of pain later.
I find myself having this conversation fairly regularly these days. If you’re in the middle of it – or just starting to think it through – I’m happy to talk it over.
David Farmer
Yes, though not through every lender. Standard buy-to-let mortgages typically require the property to be let on an assured shorthold tenancy, which an Airbnb arrangement doesn’t satisfy. Specialist lenders have developed products specifically for short term let properties, and the market has grown considerably in the last couple of years.
The key requirements are generally: demonstrated income history, realistic occupancy data, and the property needing to be freehold or on a lease that permits short-term letting.
Rather than a guaranteed monthly rental figure, lenders will typically look at your average annual income across a 12-month period, drawn from platform analytics and accounts. Some will want at least one year’s trading history; others will look at two, some won’t be worried at all.
They’ll apply a stress test to that income – working on conservative occupancy assumptions – to determine how much they’re prepared to lend. This is why clean, documented income records are so important.
Historically, yes often by a noticeable margin. The gap has been narrowing as more lenders enter the market, but you’ll generally pay a small premium over standard buy-to-let products.
The trade-off, of course, is that a well-run short term let can generate significantly higher income than a standard tenancy – so the overall numbers can still work well, even with slightly higher, or more volatile financing and swap costs.
This is more common than people realise, particularly in purpose-built blocks and converted flats. If your lease prohibits short term lets (often worded as “no holiday lets” or requiring written consent from the freeholder), you may not be able to operate legally – and lenders will often decline to finance on that basis. It’s essential to check your lease carefully before purchasing with short term lets in mind.
Your other consideration is that lenders, sneaky as they are, do check online registries and booking sites. It only takes Claude or CoPilot a few minutes so don’t presume nobody will notice.
Yes. It’s an area I’ve been working in more frequently, and one where having a broker who understands the lender landscape properly makes a real difference. The product range has improved, the lenders who understand this sector have grown in number, and getting the deal presented correctly is often the difference between an approval and a decline. If you’d like to talk through a specific situation, I’m glad to help.
Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.
Tel: 01293 541333
Email: hello@lime-fs.com
Tel: 0207 866 2102
Email: hello@lime-fs.com
Tel: 01293 541333
Email: hello@lime-fs.com
Tel: 0207 866 2102
Email: hello@lime-fs.com
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