Short-letting grosses 1.5-2.2x the equivalent long-term rent in most markets we track, but nets only 10-25% more once cleaning, management and voids are paid. That is a real premium, and it is a much smaller one than the headline multiple suggests. Short lets win decisively where the gross multiple exceeds 2x; below 1.6x the extra operational load and regulatory exposure usually are not worth it.
The detail
Run both sides of the same flat. A two-bed at £1,200 a month lets long-term for £14,400 a year, with maybe £1,000 of costs and two weeks of void — call it £13,000 net, contractually, with one tenant and four hours of your year. The same flat short-let at £115 a night and 62% occupancy grosses £26,000, an 1.8x multiple, and nets around £13,600 after a manager's 15%. The short let earned about 5% more for roughly forty times the operational effort, and it carries a licensing risk the tenancy does not.
The premium widens quickly with the multiple, because costs are largely fixed against revenue. At a 2.4x gross multiple the same property nets £19,000-£21,000 — a genuine 45-60% improvement, and worth doing. That is why the ratio, not the absolute revenue, is the decision variable: divide annual short-let RevPAR by twelve months of achievable rent, and treat 2.0x as the line.
There are two structural considerations the spreadsheet misses. Financing: many buy-to-let lenders will not lend against short-let use at all, and those that do price 0.3-0.8 percentage points higher, which can wipe out the premium on its own. And leases: a large share of UK leasehold flats contain a clause prohibiting lettings under six months, which makes the comparison moot regardless of the numbers.
The numbers that matter
Where this stops holding
The comparison is least stable exactly where it looks most attractive. A 2.5x gross multiple usually reflects constrained supply, and constrained supply is what triggers licensing intervention — so the most attractive multiples are also the ones most likely to be legislated away within three years. There is also an asymmetry of certainty that the numbers hide: the long-let figure is a contract, the short-let figure is a forecast. Discount the short-let side by 15-20% before comparing, and it will be a fairer fight.
Sources
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A HostPal Invest report runs the real occupancy, nightly rate, RevPAR, regulation risk and a buy / wait / avoid verdict for one specific property or drawn area, in any of 117 markets — not a national average. Street-Level reports from £29.