Landlords Seeing 9% Yields: Why Mid-Term Rentals Beat Traditional ASTs in the Supply Vacuum

The Landlord Exodus Is Creating a Golden Window

If you've been following the latest property headlines, you'll know the numbers are striking. According to recent reporting from Property Wire, landlords who have chosen to hold onto their portfolios rather than sell are now seeing gross yields climb as high as 9%. The reason? A massive supply vacuum. With roughly two-thirds of landlords planning to exit the market, those who remain are benefiting from surging tenant demand and rising rents.

But here's the thing most landlords are missing: the vast majority of those who stay are simply continuing with traditional Assured Shorthold Tenancies (ASTs). They're riding the wave, sure, but they're not optimising for it. And with the Renters' Rights Act introducing tighter regulations on long-term tenancies, that wave has a ceiling.

There's a smarter play. Mid-term rentals are emerging as one of the most compelling strategies for London landlords who want to capture this demand surge without bumping into the regulatory limits of traditional lettings. Let's dig into how it works, what to watch out for, and why it might not even be the best option on the table.

What Exactly Is a Mid-Term Rental Strategy?

Mid-term rentals typically refer to furnished lets with stays ranging from one to six months. Think corporate relocations, project-based contractors, medical professionals on temporary placements, families between homes, and international students on shorter programmes.

Unlike a traditional AST, which locks you into long tenancies (now with even fewer grounds for possession under the Renters' Rights Act), mid-term lets operate in a more flexible space. They're usually structured as contractual licences or fixed-term agreements that fall outside the scope of the most restrictive new tenancy regulations.

Unlike short-term lets (typically under 90 days in London), mid-term rentals don't trigger the same planning permission requirements or local authority registration rules. They sit in a sweet spot between the two models.

Why the Supply Vacuum Makes Mid-Term Rentals So Attractive Right Now

The maths is straightforward. When a huge portion of rental stock disappears from the market, the tenants who need housing don't disappear with it. They compete harder for what's left, and they're willing to pay more.

Mid-term tenants tend to be less price-sensitive than long-term renters. A corporate relocation tenant on a four-month project has a housing budget from their employer. A family waiting for their property purchase to complete needs somewhere comfortable and is willing to pay a premium for flexibility. This is the demand that's surging right now in London, and it's the demand that most landlords on traditional ASTs are completely failing to capture.

With a well-positioned mid-term rental, London landlords are regularly achieving 20% to 40% more income compared to equivalent long-term lets. When you combine that premium with the 9% gross yields already being reported, the numbers become genuinely exciting.

The Real Benefits for London Landlords

Higher Income Per Night, Per Month

Furnished mid-term lets command significantly higher monthly rents. A two-bedroom flat in Zone 2 that might achieve £2,200 per month on a traditional AST could pull in £3,000 to £3,500 per month as a furnished mid-term rental.

Regulatory Breathing Room

The Renters' Rights Act has removed Section 21 no-fault evictions and introduced new grounds for possession that many landlords find concerning. Mid-term lets, when structured correctly, can avoid many of these constraints because they fall outside the AST framework.

More Control Over Your Property

With tenancies turning over every few months, you get regular opportunities to inspect, maintain, and reposition your property. You're never stuck with a problem tenant for years on end.

Flexibility to Adapt

If the market shifts, you can pivot to short-term lets, return to a traditional AST, or even use the property yourself. That optionality has real value.

The Pitfalls You Need to Watch For

Let's be honest about the challenges, because mid-term rentals aren't a magic bullet.

Void Periods Are Real

Unlike an AST where a tenant stays for 12 to 24 months, you'll need to find new tenants every few months. Even a few weeks of vacancy can eat into your yield advantage. Marketing, vetting, and turnover management all take time and effort.

Furnishing and Setup Costs

Mid-term tenants expect a fully furnished, move-in-ready property. That means quality furniture, equipped kitchens, fast Wi-Fi, and professional-grade cleaning between stays. Initial setup can cost £5,000 to £15,000 depending on the property.

Management Intensity

Handling bookings, guest communications, cleaning schedules, linen changes, maintenance issues, and check-ins every few months is significantly more work than a traditional let. Many landlords underestimate this.

Legal Structuring Matters

Getting the tenancy agreement wrong could accidentally create an AST, bringing you right back under the Renters' Rights Act provisions you were trying to avoid. You need proper legal advice to structure mid-term lets correctly.

Platform Dependency

Most mid-term bookings come through platforms like Airbnb, Booking.com, SpareRoom, or specialist corporate housing sites. Managing multiple platforms, keeping calendars synced, and maintaining high ratings is a job in itself.

Here's Where It Gets Interesting: The Short-Term Let Comparison

If you've read this far, you're probably thinking that mid-term rentals sound promising but operationally demanding. And you'd be right. The strategy works, but it requires active management, constant tenant sourcing, and careful legal structuring.

Now consider this: professionally managed short-term lets in London deliver even higher yields, often 30% to 60% above traditional AST income, and when managed by the right partner, they require less effort from you than running mid-term rentals yourself.

Short-term lets, particularly in high-demand London boroughs, benefit from nightly rate flexibility, seasonal pricing optimisation, and access to the enormous pool of business travellers, tourists, and relocating professionals flowing through the capital. The 90-day rule in London does apply, but experienced operators like Airhosts know exactly how to structure a blended short and mid-term strategy that maximises occupancy and income year-round while staying fully compliant.

The key difference? With a professional management company handling everything, you're not the one juggling bookings, cleanings, guest communications, and platform algorithms. You're simply collecting income.

Why Airhosts Makes This Simple for London Landlords

At Airhosts, we manage the entire process from listing optimisation and dynamic pricing to guest screening, professional cleaning, and 24/7 guest support. Our London landlords benefit from a hybrid short and mid-term strategy that captures peak nightly rates when demand is high and fills gaps with premium mid-term bookings when it makes sense.

The result? Consistently higher yields than traditional ASTs, less regulatory exposure than long-term tenancies under the Renters' Rights Act, and none of the operational headaches that come with trying to manage it all yourself.

We handle the complexity so you don't have to. Our landlords tell us the best part isn't even the higher income (though that certainly helps). It's the peace of mind that comes from knowing their property is being professionally managed, well maintained, and generating strong returns without constant attention.

The Bottom Line

The landlord exodus is real, and the supply vacuum it's creating is a once-in-a-generation opportunity for those who stay. But simply holding a property on a traditional AST means leaving money on the table and accepting regulatory constraints that will only tighten over time.

Mid-term rentals are a step in the right direction. Professionally managed short-term lets are the destination.

If you're a London landlord who wants to capture the full potential of this market shift without the stress of doing it yourself, get in touch with Airhosts today. We'll show you exactly what your property could earn and how little effort it takes on your part. Your property is already an asset. Let's make it perform like one.