The need for short term let properties has changed the face of the rental market in the last few years. Many landlords across key locations in the UK have added — or at least considered adding — a short term let to their rental portfolio. It comes as no surprise when the estimated global value of short term rental properties is close to £137 billion.
This concept appeals to landlords and renters alike. As a general rule, the maximum length for a short term rental is six months, but can last for as little as one night. For renters, this means only paying for what they need, and for landlords, it can mean an influx of temporary tenants willing to pay a higher rental price for a property that meets their needs.
Short terms lets have dominated the rental market for over a decade, but how did this sudden rise come about? In this blog, we take a look at how the need for alternative accommodation bolstered the rental market and who short term lets should be advertised towards.
Where Did the Need for Short Term Lets Come From?
Travellers from all over the world need a place to keep their belongings safe and somewhere to safely spend the night. However, the cost of traversing the globe can add up pretty quickly, especially if hotels have a minimum length of stay (MinLOS). This created a gap in the market, and platforms such as Booking.com and Airbnb came on to the scene to offer people a cheaper and more convenient alternative to hotels.
Hotels also lack that “homely” feel that comes with renting a property, something of great importance to travellers. According to a report from American Express (via SiteMinder), 85% of consumers they surveyed plan on travelling twice or more for leisure in the next five years. They also expect service providers to adapt to their needs. Amongst the biggest desires they listed was finding a way to combine luxury with budget-friendly options.
Short term rental accommodation can provide a more personal and comfortable experience for tenants, but only if landlords can source affordable luxury furnishings to add a touch of quality to their property. At LOFT, we have a huge range of furniture for landlords to choose from that will create a warm and inviting space for temporary residents. Alternatively, we also provide furniture packs for time-pressed landlords and agents that include everything you need to get your property ready for tenants.
Who Else is the Short Term Let Market Aimed at?
Globetrotters are a huge demographic, but they aren’t the only people who look towards short term rental properties. While it’s certainly possible to attract travellers to your accommodation, the following markets are also key to short term letting success and present other lucrative opportunities.
Corporate clients can bring in a good bit of business for landlords with appropriate city centre properties. According to Taylor Rhodes Group, one or two-bedroom apartments work well as serviced corporate accommodation, providing your property is close to business hubs and you’ve remembered to add a touch of luxury.
Consider what business guests will be visiting the area for, and try to meet these needs. It’s more than likely they’ll be working during their stay, so why not set up a dedicated office space for corporate clients. Check out our range of low-cost office and study furniture and time-saving furniture packs that are bound to appeal to business visitors.
Home Buyers & Sellers
Getting stuck in a property chain can be extremely frustrating, so some sellers choose to sell their homes without having another in place. While they’re looking for a new property, they need somewhere to stay, which is where short term lets provide a much-needed lifeline. These temporary tenants aren’t looking for anything long term, but can’t afford to have their ordinary lives disrupted too much, especially if they have children. This leaves living out of a hotel room out of the question.
Many buyers also look far and wide for properties, meaning they may not have anywhere to stay when scouting their dream locations. Short term rental properties give house hunters a base from where they can start looking, and it allows them to work out if the area is really right for them.
The Importance of Short Term Lets
Scientific research shows us that peer-to-peer accommodation options (such as Airbnb) can be cheaper alternatives to traditional hotels (pg 2), and suitable listings open up a whole host of new and exciting travel opportunities that otherwise mightn’t have been accessible for a number of people.
Furthermore, short term let properties increase the capacity for tourists during major sporting and cultural events. As an example, when Cardiff hosted the UEFA Champions League Final in 2017, 170,000 football fans flocked to the city to watch Real Madrid and Juventus compete, which meant Cardiff’s estimated 5,000 hotel rooms were quickly snapped up. Short term rental properties alleviated much of the pressure, and landlords made very healthy profits from the event.
According to a report found in the House of Commons Library, Airbnb estimated its value to the UK economy at £3.36 billion by July 2017 (pg 19), showing short term rental properties have brought a significant boost to the tourism and leisure industry.
While there’s very little doubt that sites such as Airbnb and Booking.com have played a pivotal role in increasing tourism across the UK, it’s important to remember individuals are still responsible for their own success in this industry. Without the right location, furnishings and ambience, landlords can’t expect much to come from their short term rental properties.
How to Improve the Appeal of Short Term Rental Properties
Short terms lets provide temporary tenants with home comforts at affordable rates. With so many tourists flocking here for holidays, sporting events and to explore new cultures, there will always be a demand for these properties. That said, consumers won’t want to spend their time in accommodation that isn’t fit for purpose. This is where LOFT can step in to help.
Our expansive collection of landlord furniture will give your short term let a feeling of luxury and comfort without causing you to break the bank. For more information on how we can help design and furnish the perfect short term rental property, get in touch with a member of our team.