London Landlords Can't Sell? Turn Stranded Flats Into Mid-Term Rental Income

The London Landlord Exodus Has Hit a Wall

The headlines are hard to ignore. According to a recent report covered by The Negotiator, over 40% of landlords are planning to reduce their portfolios. The reasons are familiar: rising regulatory costs, Section 24 tax changes, and a growing sense that the numbers just don't stack up the way they used to.

But here's the problem nobody is talking about enough. Wanting to sell and actually selling are two very different things in mid-2025 London. Flat prices across the capital are down roughly £19,000 on average, and a staggering 54% of properties now require at least one price reduction before they find a buyer. For landlords sitting on one to three flats they'd love to offload, the reality is sobering: these properties are effectively stranded.

So what do you do with a flat you can't sell at a price that makes sense? You make it work harder while you wait. And that's exactly where mid-term rentals come in.

What Are Mid-Term Rentals and Why Do They Matter Now?

Mid-term rentals typically cover stays of one to six months. They sit in the gap between traditional 12-month assured shorthold tenancies and nightly short-term lets. Think of them as the Goldilocks zone of the rental market: long enough for stability, short enough to command a premium.

The demand side is strong and growing. Insurance companies need temporary housing for families displaced by floods, fires, or building defects. Relocation firms book apartments for corporate transferees arriving in London. NHS trusts and government bodies house temporary workers. Families caught between property transactions need somewhere comfortable for three months, not a hotel.

This isn't a niche. The insurance housing sector alone processes thousands of displaced household claims in London every year. And these bookings tend to come with reliable, corporate-backed payment, which means far less risk than a private tenant who might fall behind on rent.

How Mid-Term Rentals Work in Practice

If you're a landlord considering this route for a stranded flat, here's what the setup typically looks like.

Furnishing and Presentation

Most mid-term tenants expect a fully furnished, move-in-ready property. That means beds, sofas, kitchenware, wifi, and clean, modern décor. If your flat has been rented unfurnished to long-term tenants, you'll need to invest in a basic furniture package. Budget around £2,000 to £5,000 depending on the size and condition of the property.

Pricing and Income

Mid-term rents in London typically sit 20% to 40% above equivalent long-term rents. A two-bed flat in Zone 2 that might achieve £2,000 per month on a standard AST could command £2,500 to £2,800 on a mid-term basis, especially when marketed to insurance housing providers or relocation companies.

Finding Tenants

This is where things get interesting, and where many landlords hit their first stumbling block. Insurance housing placements often come through specialist networks and loss adjusters, not through Rightmove. Relocation bookings flow through corporate agencies with their own vetting processes. You need to be connected to these channels, or work with a management partner who already is. Companies like Airhosts, who specialise in London property management, already maintain these relationships and can place tenants quickly.

Legal Considerations

Mid-term lets still need proper tenancy agreements, typically using a contractual tenancy for stays under six months. You'll also want to check your mortgage terms and building insurance, as some lenders restrict short or mid-term letting. If your flat is leasehold, check the lease for any minimum tenancy length clauses.

The Pros and Cons of Going Mid-Term

What Works Well

The biggest advantage is immediate cash flow from an asset that's otherwise costing you money every month in mortgage payments, service charges, and council tax. You're earning income while waiting for the sales market to recover, and you retain full flexibility to sell when conditions improve.

Corporate and insurance tenants are also generally lower risk. Payments come from companies, not individuals, and the properties tend to be well looked after because the tenants view them as temporary.

What to Watch For

Void periods between bookings can eat into your returns if you're managing this yourself. Marketing to the right channels takes time and established contacts. Furnishing costs are an upfront expense you won't recoup if you sell quickly. And the operational demands, including cleaning turnovers, inventory checks, and guest communications, are heavier than a standard buy-to-let.

There's also the question of consistency. Mid-term demand fluctuates seasonally and can be unpredictable if you don't have a pipeline of bookings. Managing one flat this way is doable. Managing two or three while holding down another job starts to feel like running a small hospitality business.

When Mid-Term Becomes Short-Term: The Higher-Yield Option

Here's where it's worth stepping back and looking at the bigger picture. Mid-term rentals are a solid repositioning strategy, but they're essentially a compromise. You're earning more than a long-term let but less than a well-managed short-term rental, and you're still dealing with meaningful operational complexity.

Professionally managed short-term lets, covering stays from a few nights to a few weeks, consistently outperform both long-term and mid-term rentals in London's strongest postcodes. A well-optimised listing on platforms like Airbnb and Booking.com can generate 50% to 100% more than a standard AST, with the flexibility to block dates for personal use or viewings if you do decide to sell.

The catch, of course, is that short-term lets require even more active management: dynamic pricing, guest screening, 24/7 communication, professional cleaning, and compliance with London's 90-day rule. Doing this yourself across multiple properties is genuinely exhausting.

That's why landlords across London are increasingly turning to Airhosts to handle everything. With a full-service management model, Airhosts takes care of listing optimisation, guest management, cleaning, maintenance, pricing strategy, and regulatory compliance. You keep ownership and control. They handle everything else.

The Smart Move for Stranded Assets

If you're one of the thousands of London landlords caught between wanting to sell and being unable to sell at a sensible price, doing nothing is the most expensive option. Every month your flat sits empty or underperforms, you're losing money.

Mid-term rentals offer a genuine path to better returns, especially if you can tap into the insurance and relocation markets. But for landlords who want maximum income with minimum hassle, professionally managed short-term lets remain the standout strategy.

Airhosts works with London landlords every day who are in exactly this position: stuck with stock they can't shift, looking for a way to turn a cost into an income stream. If that sounds like you, get in touch for a free property assessment and find out what your flat could really be earning. Your stranded asset might just become your best-performing one.