Homes bought by landlords to rent out via short-let contracts create gross returns of between 12% and 20%, an estate agency has claimed.
These figures, published by LH1 Global, are far higher than the national average for traditional long-term rents of 3.6% highlighted by recent research from Seven Capital, although returns vary hugely from region to region.
LH1 Global says its seen a huge surge in demand from renters for short-let contracts as the UK’s staycation and corporate lets markets have recovered. ~
Also, the firms says more and more people have been choosing short-let accommodation rather than committing to longer-term ASTs as short-term employment contracts have become more prevalent, and some people choose to work from home in different locations.
“Short term rental demand has risen in tandem with people’s everchanging modern lifestyles, which has seen more people looking for temporary accommodation rather than setting down roots,” says Rayna Hunter, CEO of LH1 Global (main picture).
“Demand is outstripping supply, increasing short term rental prices rise and in turn delivering significant gross yields that are making this property type a very attractive proposition for investors.
“Short-term rentals have reshaped the housing landscape, offering landlords an investment that ensures greater freedom, flexibility, and higher profits compared to traditional long-term buy-to-lets.
“Within a constantly evolving market, investors are being drawn towards alternative investments and are particularly attracted to properties within purpose-built developments that offer management, security and ultimately peace of mind.”
LH1 Global is currently marketing apartments in Cheltenham starting at £194,500, with gross potential yields exceeding 15%.