Short term lettings

Short term lettings

Over the last decade, we have seen significant growth globally in the short-term lettings sector, particularly in popular holiday destinations. What may have begun as a side-stream of income for home/property owners has since developed into a lucrative business model. Property owners (many with modest portfolios) are collectively seen to be major competitors of hotel owners, who are subject to higher costs, stricter regulatory obligations and tax burdens. The rising use of apps and success of the 'sharing economy' has led to brands like Airbnb becoming almost synonymous to this category of property lettings and phrases like 'Airbnb tycoons'[1] have emerged.  

In addition to competition for hotel owners, there are also growing pressures of housing supply in many countries. According to the Office for National Statistics report in November 2025, there continues to be an increase in guest nights spent in short-term lets in the UK year-on-year (with Edinburgh being the only local authority reporting a reduction of 1.4%)[2]. Many countries have explored ways to balance the impact and concerns and have introduced regulations to tighten controls on short-term lettings.

We have set out a high-level summary of the controls currently in place in major cities here.

Interestingly, Airbnb have recently introduced measures to improve revenues by adding boutique and independent hotels onto its platforms in cities such as Paris, Madrid, Los Angeles and New York[1]. It is unclear whether the move is a reflection of the impact of restrictions in major cities, a sign of converging markets, or a creative desire to 'level the playing field' on technology and convenience factors.

Meanwhile, investor confidence in the aparthotel sector also continues to grow[1]. Savills' recent published research indicated that, with circa €1.2 billion transaction volume in 2025 across the European serviced apartment sector, serviced apartments achieved 79% occupancy.[2] This year, Hilton have launched its new 'Apartment Collection' brand in New York, Washington DC and Atlanta. This may indicate consumer preference in a specific type of accommodation as opposed to any regulatory or tax advantage for private Airbnb rentals.

Aside from tightening controls, many countries have focussed efforts on registration requirements. The UK is introducing a new registration scheme for short-term lets which is expected to become live imminently in 2026. The scheme will require owners and landlords of short-term lets to provide details of the property, occupancy rates and evidence of compliance with health and safety regulations. The table above also indicates other cities with registration and licensing requirements.  When announcing the proposed registration scheme[3], the UK government indicated a desire to achieve a balanced approach: 'The government has also decided that the registration scheme should be designed to be as light touch, low cost and simple to use as possible - this will underpin all our decisions on how to deliver. For example, we do not wish to disproportionately apply new regulation on property owners that let out their home infrequently. We will continue to consider the case for the potential application of a threshold in finalising the register'.  

The balance of (or friction between) these considerations are frequently highlighted in the media. A BBC article in October 2025 stated that Westminster City Council were investigating 2,700 properties for alleged breaches of the 90-day limit.[4]A registration scheme can support better monitoring of compliance and data sharing can enhance the relevant government's ability to understand local impact. If the requirements are conducive of good quality accommodation and not overly cumbersome, this can make requirements fairer for competing hotel owners whilst supporting a more sustainable growth of the short-term lettings sector.  It remains to be seen whether these schemes are effective in achieving this delicate balance.