Why Mid-Term Rentals Let London Landlords Bypass the RRA's Rent Tribunal Cap

Two-Thirds of Landlords Want Higher Rents, But the RRA Has Other Plans

A recent Property Wire report confirmed what most London landlords already suspected: two-thirds of landlords are planning to raise rents in response to the Renters' Rights Act. The motivation is clear. Mortgage costs have risen, regulatory compliance is more expensive than ever, and landlords quite reasonably need their rental income to keep pace.

But here's the catch. Under the RRA's new rent-increase framework, wanting to raise rents and actually raising them are two very different things. The Act introduces a once-a-year, tribunal-tested mechanism that gives tenants the right to challenge any increase they consider above market rate. For many London landlords, this creates a structural income ceiling that's already suppressing returns.

So what's the alternative? An increasing number of savvy property investors are turning to mid-term rentals, typically stays of one to three months, which operate entirely outside the RRA rent-increase framework and allow landlords to reset pricing with every single booking.

How the RRA Rent Tribunal Process Actually Works

Let's break down the mechanics, because understanding them is essential before you can appreciate why mid-term rentals sidestep the problem so effectively.

Under the Renters' Rights Act, landlords on assured tenancies can only increase rent once per year. They must serve a Section 13 notice proposing the new amount. If the tenant disagrees, they can refer the increase to the First-tier Tribunal, which will determine what a "market rent" should be for that property.

In theory, this sounds fair. In practice, it creates several problems for landlords.

First, the tribunal process takes time. While the case is pending, the old rent continues. This lag alone can cost landlords months of income they'll never recover.

Second, tribunal determinations tend to be conservative. Panels assess market rent based on comparable evidence, but they frequently anchor to figures below what landlords could genuinely achieve on the open market, especially in fast-moving London boroughs where rents shift quarter to quarter.

Third, the process itself discourages ambitious increases. Many landlords, knowing a tribunal referral is likely, pre-emptively moderate their proposed increase just to avoid the hassle. The result is a chilling effect on rental income across the board.

Why Guaranteed Rent Schemes Make It Even Worse

Some landlords turn to guaranteed rent operators hoping for stability. The pitch sounds appealing: a fixed monthly income with no voids and no tenant management. But the reality for most London landlords is disappointing.

Guaranteed rent companies need their own margin. They typically offer landlords 10% to 25% below true market rent, then sublet or manage the property at higher rates to capture the spread. Under the RRA, these operators face the same tribunal constraints when increasing rents on their own occupiers, which means they have even less room to pass income through to you.

The net effect is that guaranteed rent landlords often end up earning significantly less than they would managing the property themselves, and certainly less than they would with a well-run mid-term rental strategy.

Mid-Term Rentals: Uncapped, Market-Responsive, Tribunal-Free

Here's where mid-term rentals change the equation entirely.

Mid-term lets, generally defined as furnished stays of one to three months, serve a completely different tenant base. Think relocation professionals settling into a new London role, insurance housing tenants displaced by property damage, international contractors on fixed assignments, and corporate employees on extended projects. These tenants need quality, fully furnished accommodation for a defined period, and they're willing to pay a premium for it.

Critically, because each stay represents a new contractual agreement rather than a continuing tenancy, the RRA's annual rent-increase restrictions simply don't apply. There's no Section 13 notice. There's no tribunal referral. You set a fresh rate for every booking cycle based on current market conditions.

This means your pricing stays responsive to demand. If corporate relocation activity surges in Q1, you price accordingly. If a major insurance event displaces hundreds of families in your borough, you can respond to that demand in real time. Your income reflects what the market will actually pay right now, not what a tribunal panel decided was fair six months ago.

The Advantages at a Glance

Mid-term rentals offer London landlords several compelling benefits:

• No tribunal risk. Each booking is a new agreement at a new price.
• Higher average yields. Furnished mid-term lets in London typically command 20% to 40% more per month than equivalent long-term ASTs.
• Quality tenants. Corporate relocations, insurance placements, and contractor bookings tend to attract reliable, professional occupants.
• Flexibility. You retain the ability to use your property personally or sell without navigating complex possession proceedings.

The Pitfalls to Watch For

Mid-term rentals aren't without challenges, and it's important to go in with realistic expectations.

Turnover is higher than traditional lets, which means more cleaning, more check-ins, and more wear on furnishings. You need professional-quality furniture, linens, and amenities to compete in this market. Marketing across multiple platforms (Airbnb, Booking.com, corporate housing portals, direct channels) requires expertise and constant attention. And compliance still matters: you'll need to meet safety regulations, handle council tax correctly during void periods, and ensure your mortgage and insurance permit short and mid-term letting.

Done well, the returns are exceptional. Done poorly, the operational burden can quickly eat into your margins.

The Simplest Path: Professional Short-Term Let Management

This is exactly why so many London landlords partner with a professional management company rather than trying to run mid-term rentals solo.

At Airhosts, we manage the entire process from end to end. We handle multi-platform listing and pricing optimisation, guest vetting and check-in, professional cleaning and linen services, maintenance coordination, and regulatory compliance. Our landlords earn premium yields without lifting a finger.

The comparison is stark. Under the RRA, a traditional long-term landlord faces tribunal-tested rent caps, months of administrative friction, and income that lags behind the market. A guaranteed rent landlord sacrifices even more margin in exchange for false peace of mind. But a landlord working with Airhosts on a professionally managed short-term and mid-term let strategy enjoys market-responsive pricing, high-quality tenants, and genuinely hands-off ownership.

Your Property Should Earn What It's Worth

The Renters' Rights Act was designed to protect tenants, and it does that effectively. But for London landlords, the practical consequence is a growing gap between what your property could earn and what the tribunal process allows you to charge. Mid-term rentals close that gap entirely.

If you own a property in London and you're tired of watching your returns erode under regulatory ceilings, it's time to explore what professional short-term let management can do for you. Airhosts works with landlords across London to unlock the full income potential of their properties, with no tribunal risk, no operational stress, and no compromise on quality.

Get in touch with the Airhosts team today and find out exactly what your property could be earning.