BTL 'Certainty' After the Renters' Rights Act? London Landlords Have a Better Play

The mortgage broker headlines are rolling in. Now that the Renters' Rights Act (RRA) has landed and the dust is settling, the message from lenders is clear: buy-to-let is back, baby. "Certainty" is the word of the moment, and brokers are eager to reassure landlords that the new periodic tenancy framework is something lenders can work with.

But here's the question savvy London landlords should be asking: certain for whom, exactly?

Because when you strip away the optimism and look at the numbers, the "certainty" on offer is sub-4% net yields in most London postcodes. That's not exactly the stuff of financial freedom. Meanwhile, there's a parallel market booming right under our noses, and it's delivering double or even triple those returns for landlords who know where to look.

Let's talk about serviced accommodation for corporate and contractor clients, and why it's fast becoming the smartest play in London property.

What the Renters' Rights Act Actually Means for BTL

First, let's give credit where it's due. The RRA has removed some of the regulatory ambiguity that was keeping institutional lenders cautious. With assured shorthold tenancies (ASTs) abolished and rolling periodic tenancies now the default, there's a clearer framework for everyone. Lenders know where they stand, and brokers are right that this brings a degree of predictability to buy-to-let underwriting.

But predictability isn't the same as profitability.

Lenders are recalibrating their affordability criteria, which often means tighter stress testing and lower maximum loan amounts. Combine that with elevated mortgage rates, rising compliance costs, and the reality that London rents, while high, haven't kept pace with expense inflation, and you're left with razor-thin margins.

For many London landlords, the net yield on a traditional BTL property after mortgage payments, management fees, maintenance, insurance, and void periods sits somewhere between 2.5% and 4%. That's before you factor in the occasional nightmare tenant or a boiler replacement in January.

So yes, BTL is "viable." But is it optimal? Not even close.

The Serviced Accommodation Opportunity in London

Here's where things get interesting. London is in the middle of a sustained corporate travel and infrastructure boom. Major projects like HS2, Crossrail extensions, data centre construction, and financial services expansion are driving relentless demand for quality, flexible accommodation.

Corporate clients and contractors don't want sterile hotel rooms for weeks or months at a time. They want well-furnished apartments with kitchens, workspaces, and a sense of home. They're willing to pay a premium for it, and their employers are happy to foot the bill.

Serviced accommodation (SA) is the model that meets this demand. Instead of locking into a single long-term tenancy at a fixed rent, you furnish your property to a high standard and let it on a short-term or medium-term basis to business travellers, relocating professionals, and project-based contractors.

The numbers tell the story. A one-bedroom flat in zones 2 or 3 might generate £1,400 to £1,600 per month on a traditional AST. That same property, positioned as serviced accommodation and marketed to corporate clients, can generate £2,800 to £4,500 per month depending on location, season, and occupancy. At Airhosts, we regularly see London landlords double their gross income within the first quarter of switching.

How Corporate Serviced Accommodation Works

The model is straightforward, but execution matters. Here's what's involved:

Furnishing and setup. Your property needs to be guest-ready, with quality furniture, fast Wi-Fi, a fully equipped kitchen, and fresh linens. Think boutique hotel meets comfortable flat. The upfront investment typically runs between £3,000 and £8,000, depending on what you're starting with.

Listing and distribution. Corporate bookings come through platforms like Booking.com and Airbnb, but also through direct relationships with relocation agents, corporate travel managers, and contractor housing programmes. The best operators work across all channels simultaneously.

Guest management. Check-ins, check-outs, cleaning between stays, maintenance coordination, and guest communication all need to run like clockwork. This is where most DIY landlords hit a wall.

Pricing optimisation. Dynamic pricing is essential. Nightly rates should flex based on demand, seasonality, local events, and competitor activity. Getting this right is the difference between 65% and 90% occupancy.

Compliance. You'll need to ensure your property meets local planning requirements, that your lease or mortgage permits short-term letting, and that you're registered appropriately with your local council. In most London boroughs, the 90-day rule applies to short lets, but there are well-established pathways to operate beyond this with planning permission or by focusing on 30-night-plus bookings, which fall outside the restriction entirely.

The Pros

• Significantly higher yields. Net returns of 8% to 12% are realistic and common for well-managed London SA properties.
• Flexibility. No long-term tenancy lock-in means you can use the property yourself, sell with vacant possession, or adjust your strategy as the market shifts.
• Lower risk of problem tenants. Corporate guests and contractors are typically low-risk, respectful occupants. Their employers often guarantee payment directly.
• Growing demand. London's infrastructure pipeline and status as a global business hub mean corporate SA demand is only heading in one direction.

The Cons and Pitfalls to Watch

Let's be honest about the challenges, because this isn't a magic bullet.

• Operational intensity. Running SA properly requires daily attention to bookings, guest communication, cleaning schedules, and maintenance. It's a hospitality business, not a passive investment.
• Regulatory complexity. The 90-day rule, planning permissions, and evolving council enforcement mean you need to know the rules inside out or work with someone who does.
• Furnishing costs and wear. Furniture, appliances, and soft furnishings take more of a beating with frequent guest turnover than with a single long-term tenant.
• Void risk if poorly managed. Without strong marketing, competitive pricing, and excellent reviews, occupancy can drop quickly. Amateur operators often underperform the market significantly.
• Mortgage restrictions. Not all BTL mortgages permit short-term letting. You may need to switch to a specialist SA or holiday-let mortgage product.

The bottom line? The returns are there, but only if the operation runs smoothly. And that's where most landlords face a genuine choice: invest enormous time learning hospitality management, or hand it to professionals who already have the systems, teams, and relationships in place.

Why Professionally Managed SA Beats DIY Every Time

The landlords who thrive in serviced accommodation are rarely the ones doing it all themselves. They're the ones who've partnered with a specialist management company that handles everything from listing optimisation and dynamic pricing to professional cleaning, guest vetting, and 24/7 support.

This is exactly what Airhosts does for London landlords. We take the complexity of serviced accommodation and turn it into a genuinely hands-off income stream. Our team manages the full guest experience, keeps your property in immaculate condition, maximises your occupancy, and ensures you're fully compliant with London's regulatory landscape.

While the brokers are selling "certainty" at 3.5% yields, our landlords are seeing net returns that make traditional BTL look like a savings account.

The Clearest Path Forward for London Landlords

The Renters' Rights Act hasn't killed buy-to-let. But it has sharpened the question every London landlord should be asking: is my property working as hard as it could be?

If you're sitting on a well-located London flat earning modest returns through a long-term tenancy, you're leaving serious money on the table. Corporate and contractor demand for quality serviced accommodation is surging, and the landlords repositioning now are the ones who'll look back and wonder why they didn't do it sooner.

Ready to see what your property could actually earn? Get in touch with Airhosts today for a free, no-obligation rental appraisal. We'll show you exactly what your property is worth in the serviced accommodation market, and how we make the whole thing effortless. Your property deserves to perform. Let's make it happen.