Yes — a well-run entire-home short let still nets 5-8% on purchase price in the markets we track, down from the 8-12% that was routine in 2019. The compression is real but it is not uniform: it has hit capital-city cores hardest, where listing supply grew fastest and licensing arrived first, while mid-sized regional and leisure markets have held their margins almost intact. Profitability in 2026 is decided at the postcode, not the city.
The detail
Three things changed at once between 2019 and 2026. Supply roughly doubled in most large European markets — Inside Airbnb's quarterly snapshots show active entire-home listings up 80-120% over the period in cities like Lisbon, Madrid and Athens — which pulled occupancy down even as travel demand recovered. Nightly rates rose with inflation, so gross revenue mostly held. What actually broke the margin was the cost side: full-service management settled at 15-25% of gross, cleaning rates rose faster than ADR, and mortgage costs went from roughly 2% to roughly 5% on a typical buy-to-let product.
The tax treatment changed too. In the UK the Furnished Holiday Lettings regime was abolished from 6 April 2025, removing full mortgage-interest deductibility, capital allowances on furniture and the capital-gains reliefs that had made short lets structurally more attractive than an ordinary rental. For a higher-rate taxpayer with a mortgage, that single change is worth 1-2 percentage points of net yield.
What survives is a narrower, more operational business. The listings still clearing 8%+ net in our data share the same profile: bought at a price that works on a long-let basis too, run at a 3-night minimum stay to cut changeover cost, priced dynamically, and sitting in a market where the licensing regime is settled rather than pending.
The numbers that matter
Where this stops holding
City-level averages hide a spread of roughly 3x between the top and bottom quartile of listings on the same street, so a market average tells you almost nothing about the property you are actually considering. The averages also include a long tail of part-time hobby listings that rent 40 nights a year and drag every figure down. And none of this rescues a bad purchase price: if you are buying at a 4% gross yield with a 5.5% mortgage, no occupancy rate makes the arithmetic work.
Sources
Get this answered for your address
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.