Rent Stagnation and the Bidding Ban: Why Mid-Term Lets Are London Landlords' Best Move in 2026

Rents Have Stopped Rising. Now What?

For the first time since 2017, advertised private rents across Great Britain have stopped climbing. According to Rightmove data reported by The Guardian, asking rents have flatlined, with only 6% of properties letting above asking price. In London, where landlords have relied on annual rent reviews and competitive bidding to keep pace with inflation, this shift feels particularly sharp.

Make that sharper still: the Renters' Rights Act's rental bidding ban comes into force on 1 May 2026. Under the new rules, landlords and agents advertising a periodic tenancy must state a single price and cannot invite, encourage, or accept bids above it. Combined with flat market rents, London landlords on traditional Assured Shorthold Tenancies now face a structural income ceiling that is unlikely to lift any time soon.

So where does real income growth come from? For a growing number of savvy property investors, the answer is mid-term rentals.

What Exactly Are Mid-Term Rentals?

Mid-term rentals sit between the traditional 12-month AST and the nightly Airbnb model. Stays typically range from one to six months, and they target a specific set of tenants: corporate contractors on project assignments, professionals relocating to London, families in insurance-funded temporary housing after a flood or fire, and international executives on secondment.

These tenancies are usually structured as contractual licence agreements or short fixed-term tenancies rather than periodic ASTs. That distinction matters enormously right now, because the rental bidding ban and many of the Renters' Rights Act's restrictions on rent increases apply specifically to periodic tenancies. A fixed-term agreement for a defined mid-term stay falls outside that framework entirely.

In plain English: you can set, adjust, and negotiate your pricing freely for each new mid-term booking without breaching the new rules.

Who Are the Tenants, and Why Do They Pay More?

Let's look at the three core demand segments.

Relocation Tenants

London attracts tens of thousands of domestic and international professionals each year who need a comfortable, furnished home while they settle in. These tenants want somewhere liveable from day one, with WiFi, kitchenware, and flexible terms. They'll pay a premium for convenience and certainty, and their employers often cover housing costs directly.

Insurance and Temporary Housing

When a homeowner's property is damaged by fire, flooding, or subsidence, their insurer needs to place the displaced family in suitable accommodation, sometimes at very short notice. Insurers contract at fixed nightly or weekly rates that frequently exceed standard market rents by 30% to 60%. Demand is consistent and counter-cyclical, meaning it doesn't depend on the broader rental market.

Corporate Contractors

From infrastructure engineers to consulting teams, companies regularly need furnished accommodation near project sites for one to six months. Procurement teams value reliability, professional invoicing, and quality assurance, and they budget accordingly. This is a segment where working with a professional management company like Airhosts gives landlords a real edge, because corporate bookers want a single, trusted point of contact.

The Financial Case: Breaking Through the Ceiling

Let's put rough numbers on it. A one-bedroom flat in Zone 2 might achieve £1,800 per month on a traditional AST. That same flat, furnished to a good standard and marketed to mid-term tenants, could achieve £2,400 to £3,200 per month depending on the segment and season. Even after accounting for slightly higher management costs and furnishing expenses, net income often exceeds traditional letting by 25% to 50%.

Crucially, you reprice at every changeover. If inflation runs at 4% and the AST market stays flat, your mid-term rates can adjust in real time. That is the structural advantage.

Pitfalls and Practicalities to Watch

Mid-term letting is not a set-and-forget strategy. Here are the things landlords need to consider.

Furnishing and Setup Costs

You need a well-furnished property with quality basics: good beds, reliable broadband, a fully equipped kitchen, and clean, modern interiors. Budget £3,000 to £8,000 depending on the property size and starting condition.

Void Periods

Unlike a 12-month AST with guaranteed rent, mid-term lets carry the risk of gaps between bookings. Effective marketing, multi-platform listing, and professional management reduce this risk significantly, but it cannot be eliminated entirely.

Compliance

You still need gas safety certificates, EPCs, electrical safety checks, and appropriate insurance. If your property falls within a local authority area with an Article 4 direction restricting short-term lets, check whether stays under 90 days require planning permission. Mid-term lets of 90 days or more generally avoid this issue.

Management Intensity

Coordinating changeovers, handling maintenance, vetting tenants, managing multiple booking platforms, and issuing invoices to corporate clients is genuinely time-consuming. This is where the strategy starts to look less like passive income and more like running a small business.

When Mid-Term Meets Short-Term: The Full Picture

Here is something worth considering. Many of the operational systems you need for mid-term lets, including professional cleaning, guest communication, dynamic pricing, and listing management, are identical to those used in short-term let management. And short-term lets, when managed well, typically generate even higher yields.

A professionally managed short-term let in London can outperform a mid-term let by 20% or more in gross income, especially during peak travel seasons, major events, and holiday periods. The 90-day rule in London does apply to whole-property short-term lets, but experienced managers like Airhosts build hybrid calendars that blend short-term and mid-term bookings to maximise revenue across the full year while staying fully compliant.

The real question for most landlords is not "which strategy is best?" but rather "who is going to execute this for me?"

Why Landlords Choose Airhosts

At Airhosts, we manage the entire process for London landlords: from furnishing advice and professional photography to multi-platform listing, dynamic pricing, guest vetting, cleaning coordination, and 24/7 guest support. We blend short-term and mid-term bookings to eliminate voids and maximise annual income. Our landlords benefit from the premium pricing of both strategies without lifting a finger.

While the traditional rental market stagnates and new legislation narrows your room to manoeuvre, a professionally managed short-term and mid-term let strategy is the clearest route to real, growing, hands-off income from your London property.

If your rental income has flatlined and you want to see what your property could actually earn, get in touch with Airhosts today. We will show you the numbers, and they tend to speak for themselves.