Long let or short let? How the numbers compare.

Example · £400,000 flat, a year	Long let	Short let
Income	£23,077	£45,990
Letting, management and platform fees	£3,323	£12,255
Running costs	£4,954	£17,445
Net operating income	£14,800	£16,290
Mortgage interest	£13,200	£13,200
Pre-tax cashflow	£1,600	£3,090

These are estimates before tax, from the investor calculator's example inputs on 5 October 2026. They illustrate the method. They aren't a forecast for any property.

The example

The flat costs £400,000 in England. You're not UK resident and already own a home, so stamp duty is £38,000. You put down 40% and borrow the rest on an interest-only mortgage at an example rate of 5.5%.

As a long let, it rents for £2,000 a month, sits empty for two weeks a year and pays a letting agent 12% plus VAT. For scale, the Office for National Statistics put average private rent at £1,459 a month in England and £2,332 in London in August 2026. Those figures are provisional and were published on 16 September 2026.

As a short let, it books at £160 a night, with 70% occupancy and an average stay of three nights. Guests pay a £60 cleaning fee, and each clean costs you £55. The platform keeps 15.5%, which is Airbnb's fee for most hosts as of October 2026, VAT included where it applies. A manager takes 15%, including VAT, of what's left after cleaning costs and platform fees.

Where the short-let income goes

The short let brings in almost twice as much: £45,990, against £24,000 of rent before empty weeks. It also costs far more to run. Platform and management fees come to £12,255. Cleaning is £4,684. You pay utilities and broadband (£2,400 in the example) and council tax (£1,800), plus guest supplies, higher insurance and a 3% reserve for replacing furnishings.

So net operating income ends up only £1,490 a year higher. After the same £13,200 of interest, pre-tax cashflow is £3,090 against £1,600. The short let also needs £8,000 more cash at the start, for furnishing: £208,600 against £200,600.

Gross yield flatters the short let: 11.5% against 6.0% here. Net yield, after costs, is 4.1% against 3.7%. Compare net figures. How to calculate rental yield explains the difference.

Who pays the bills

Council tax falls on the adult who lives in the home as their only or main residence. The owner is normally liable only when no one does. On a long let that's usually your tenant, who normally pays the utility bills too.

A short let has no resident, so you pay. In England it moves to business rates only if it's available to let commercially for short periods totalling at least 140 nights in the current and previous year, and was actually let for at least 70 nights in the previous 12 months. Those tests have applied since 1 April 2023. While it stays on council tax, your council can charge up to twice the normal amount, sometimes called the second homes premium. Check the local rate before you rely on the example's £1,800.

What moves the result

A short let's income depends on bookings, so its result swings further. In the example it breaks even at about 61% occupancy, roughly 224 nights a year. At 60% it runs at a loss of about £437 a year before tax. At 80% it makes about £6,617. It needs about 66% just to match the long let.

The long let is steadier, but not fixed. Rent 10% lower turns its £1,600 into a loss of £260. An interest rate one point higher, at 6.5%, turns it into a loss of £800. The same rise leaves the short let at £690.

Both examples use an interest-only mortgage. On a 25-year repayment mortgage at 5.5%, both show negative cashflow before tax: about £2,886 a year for the long let and £1,395 for the short let. That's because part of every payment repays the loan.

Tax treats them much the same

Since 6 April 2025, short lets no longer get the furnished holiday lettings tax treatment. For companies the date was 1 April 2025. Short-let income is now part of your property business and taxed like a long let. If you own as an individual, mortgage interest isn't deducted from rental income. Instead you get a tax reduction at the basic rate, 20%.

From 6 April 2027, individuals in England and Northern Ireland pay separate rates on property income: 22%, 42% and 47%. The tax reduction for mortgage interest rises to 22%. Scotland and Wales can set their own property rates. Property income tax from 2027 and how short lets are taxed now cover both changes.

VAT still differs. Letting a home on a long let is normally exempt. Holiday accommodation is standard-rated. A UK-based owner must register for VAT once taxable turnover goes over £90,000 in a rolling 12 months, and exempt rent doesn't count towards that. For them, the example's £45,990 is under the threshold. If you and your business are based outside the UK, the threshold doesn't apply, and you may need to register whatever your turnover. Once registered, you owe VAT on what guests pay. In the example that's £7,665 a year, which turns the short let's £3,090 into a loss of about £4,575 before tax. Your accountant confirms how it applies to you.

The rules differ too

Long lets in England changed on 1 May 2026, under the Renters' Rights Act 2025. Tenancies now roll on with no fixed end date, and section 21 "no-fault" evictions have ended. You need a legal reason to take the property back. You can't use selling or moving in as the reason in the first 12 months of a tenancy. You can raise the rent once a year, with at least two months' notice, through the section 13 process. You can't ask for more than one month's rent in advance.

Short lets have their own rules, including fire safety guidance for holiday homes and gas safety duties. The government expects a national registration scheme for short-term lets in England to begin in March 2027. England's short-let register explains what's known so far. Before you choose, check that your lease, your mortgage and your insurance allow short lets.

Choosing between them

A long let usually means steadier income, less day-to-day work and a tenant who pays the bills. A short let can earn more, but it depends on strong occupancy and close management, and the result moves with every booking. Run both with your own figures in the calculator, and compare net yield and cashflow, not gross income.

If you'd rather not run a short let yourself, Naras Property Management offers two routes. Full management, for a fee. Or guaranteed rent: a fixed monthly rent for an agreed number of years, written into your agreement and paid whether or not the property is booked.