Rents Rising Post-RRA But Capped at 2-5%: Why Mid-Term Rentals Offer Uncapped Income for London Landlords

London Landlords Are Already Feeling the RRA Squeeze

The ink on the Renters' Rights Act is barely dry, and the data is already telling a clear story. According to Chestertons' latest figures from July 2026, a third of landlords have raised asking rents since the Act came into force. That's hardly surprising. Landlords saw the new regulatory landscape coming and moved quickly to position themselves before the rules fully bedded in.

But here's the catch: the government's guidance on what constitutes a "reasonable" annual rent increase is landing firmly in the 2-5% range. For landlords dealing with rising mortgage costs, higher compliance requirements, and the ongoing expense of maintaining a London property, that ceiling feels painfully low.

So where does that leave you if you're a London landlord looking for genuinely market-responsive income? One increasingly popular answer is mid-term rentals. Let's dig into what that strategy actually involves, how it sidesteps the RRA framework, and what you need to know before making the switch.

What Exactly Are Mid-Term Rentals?

Mid-term rentals sit in the space between traditional short-term lets (nightly or weekly bookings) and long-term assured tenancies. Typically, we're talking about furnished stays lasting anywhere from one to six months. Think corporate relocations, project-based professionals, families between homes, international students on semester placements, or medical professionals on temporary assignments.

Crucially, these lettings are structured as licences to occupy or contractual tenancies that fall outside the scope of the Renters' Rights Act. Because they don't create an assured tenancy, the 2-5% cap on "reasonable" rent increases simply doesn't apply. Each booking is priced independently based on current market conditions, seasonal demand, and property quality.

For London landlords, this distinction is everything.

How Mid-Term Rental Pricing Actually Works

Unlike a traditional buy-to-let where you agree a monthly rent and then face regulatory hurdles every time you want to increase it, mid-term rentals are priced per booking. When one guest checks out and the next checks in, you set a fresh price.

This means your income is genuinely responsive to the market. If demand spikes in your area because of a major corporate project, a hospital expansion, or seasonal tourism, your pricing reflects that in real time. If the market softens, you can adjust to maintain occupancy without being locked into a below-market rate for 12 months.

In practice, well-located London properties on a mid-term rental strategy regularly outperform equivalent long-term lets by 20-40% on a gross income basis. In prime areas like Canary Wharf, Kensington, Shoreditch, and Marylebone, that premium can be even higher.

The Real Advantages for London Landlords

Uncapped Income Growth

This is the headline benefit. While your neighbour with a traditional AST is limited to a 2-5% annual increase (and risks a tribunal challenge even at that level), your mid-term rental income moves freely with the market.

Better Tenant Quality and Lower Risk

Mid-term guests tend to be professionals, corporate tenants, or families in transition. They're often booking through platforms or agencies that vet them in advance. The risk of problematic tenancies, rent arrears, or lengthy eviction processes drops significantly.

Property Condition

Because turnovers happen regularly, your property gets inspected and refreshed between each stay. Issues get caught early. Compare that to a long-term tenancy where you might not see the inside of your property for months or even years.

Flexibility

Need to use your property for a few weeks? Want to carry out a renovation? With mid-term lets, you simply block out the dates. No Section 21 drama, no months of notice periods.

What You Need to Watch Out For

No strategy is without its challenges, and it's important to go in with your eyes open.

Higher Management Intensity

Mid-term rentals require more active management than a set-and-forget long-term let. You need professional listings, responsive communication, check-in coordination, cleaning between stays, and ongoing quality control. This isn't a casual undertaking.

Furnishing and Setup Costs

Properties need to be fully furnished to a high standard, with reliable Wi-Fi, quality linens, a well-equipped kitchen, and all utilities included in the price. The upfront investment is real, though it pays for itself quickly when your monthly income jumps by 30% or more.

Void Periods

Unlike a 12-month AST where occupancy is guaranteed (assuming your tenant pays), mid-term lets carry some occupancy risk. In a well-managed portfolio, London occupancy rates typically sit at 85-95%, but gaps can occur. This is where professional management and multi-platform marketing make a huge difference.

Regulatory Awareness

While mid-term lets fall outside the RRA, you still need to comply with local planning rules, building regulations, fire safety requirements, and any relevant licensing schemes. In some London boroughs, stays under 90 consecutive nights may trigger short-term let regulations. Getting the structure right from the start is essential.

The Management Question: DIY or Professional?

This is where many landlords hit a crossroads. The income potential of mid-term rentals is genuinely compelling, but the operational demands can quickly become a second job. Listing management, guest communications, dynamic pricing, cleaning coordination, maintenance response, regulatory compliance: the list is long.

Some landlords thrive on this. Many others discover, after a few months of late-night guest messages and emergency plumber calls, that the premium income isn't worth the premium hassle.

This is exactly why companies like Airhosts exist. Rather than wrestling with the operational complexity yourself, you hand the entire process to a professional management team that handles everything from listing optimisation and dynamic pricing to guest vetting, check-ins, cleaning, and ongoing property care.

Why Professionally Managed Short-Term Lets Offer the Best of Both Worlds

Here's the honest truth: the mid-term rental strategy works brilliantly, but it works best when it's part of a broader flexible letting approach that also includes short-term stays. A professional management company can blend short, mid, and seasonal bookings to maximise your occupancy and income throughout the year, adjusting the strategy as the market shifts.

With Airhosts, London landlords get genuinely hands-off property management combined with the kind of market-responsive, uncapped income that the post-RRA landscape has made almost impossible to achieve through traditional buy-to-let. Your property is listed across multiple platforms, priced dynamically, maintained to a high standard, and fully compliant with London's regulatory requirements.

You keep the upside. We handle the work.

The Bottom Line for London Landlords

The Renters' Rights Act has fundamentally changed the economics of traditional buy-to-let in London. With rent increases capped and compliance costs rising, the old model is delivering thinner and thinner margins. Mid-term and short-term rentals offer a genuine alternative: uncapped, market-driven income with better flexibility and stronger tenant quality.

But the strategy only delivers its full potential when it's professionally managed.

If you're a London landlord who wants higher yields without higher stress, talk to Airhosts. We'll assess your property, show you exactly what it could earn on a flexible letting strategy, and take the entire management burden off your hands. Your property works harder. You don't have to. Get in touch today and find out what your London property is really worth.