Short-stay property

Occupancy is the share of nights someone pays for. It is not the share of nights the property is listed, and it is not the share of nights it is full in August. A building can be booked solid for a school holiday and empty for long stretches of the winter. The figure that matters is the year, counted in nights that were paid, after cancellations.

Who the guest is changes that count. In many coastal and rural lets the guest is a domestic household on a short break. In parts of London and in some city centres the guest is more often someone in town for work, an event or a flight. Those are different order books. A Lake District week, a Cornwall week and a Manchester conference week do not prove anything about each other. They are examples of demand, not a shortlist.

No occupancy rate is printed. A rate without the year, the building and the definition of ‘available’ is not information.

Seasonality is the reason a single week cannot be annualised. School holidays, weather and events pile demand into a minority of the year. The rest of the year is the underwriting case: heating an empty house, a manager on a retainer, and a mortgage payment that does not take August off.

Cities are less tied to the school calendar and more tied to the working week and to events. A flat that fills for a festival and a cottage that fills for summer are both seasonal. The seasons are simply different. Scotland’s winter is not Cornwall’s winter. Averaging them describes neither.

Gross is rent before the cost of producing it, set against the price of the asset. Net is what remains after those costs. On a long let the gap is service charge, maintenance, voids, insurance and tax. On a short stay the gap is wider, because the operator is providing a night, not only a roof.

The costs that sit between the two include a manager or the owner’s own time, cleaning and linen at each changeover, utilities the guest does not pay as a household would, platform fees, insurance, council tax or business rates, a licence fee where a licence exists, and the nights with no guest. A peak nightly rate multiplied by every night in the year is not a gross figure. It leaves out the empty nights, which is where these sums usually fail.

One of those costs can change its name. In England and in Wales a self-catering property moves from council tax onto business rates only if it meets the night tests the Valuation Office Agency publishes: how many nights it was available, how many it was actually let, and the intention for the next year. Missing the test leaves the holding on council tax. Meeting it does not create a yield. It changes which bill is in the file, and the tests are not the same number on each side of the border. Scotland and Northern Ireland are different rules again.

This page does not calculate either ratio. A yield without the cost line is an advertisement.

Someone has to meet the guest, turn the property around, answer for damage and keep the listing honest. A professional manager charges for that. An owner who does it has spent the time, which is a cost even when it does not appear on an invoice. The fee is not the whole cost. Cleaning, laundry, restocking and the call-out on a Sunday are separate.

City apartments and remote houses do not cost the same to manage. Distance, the number of changeovers and whether the building has a concierge change the bill. A fee that is a share of bookings falls in the busy weeks and looks small in February. A retainer is the reverse. Cleaning, laundry and the Sunday call-out sit on top of either quote. A figure given for a full August is not the figure for the year.

Greater London is the clear English rule. Under section 44 of the Deregulation Act 2015, use of a home as temporary sleeping accommodation is not a material change of use if the nights in that calendar year do not exceed ninety, and if the person providing the accommodation is liable for council tax on the premises. Above that, planning permission is the question. The cap is London’s. It is not a licence to do the same thing, for the same number of nights, in every English town.

Elsewhere in England, the local planning authority decides whether the use has become a material change. The GOV.UK guidance reviewed on 24 March 2026, and updated on 15 May 2026, still marked a national registration scheme for short-term lets as not yet in force, and said it was expected to begin in 2026. Treat the commencement date as something to check. That proposal is not the private-rented landlord register announced on 9 September 2026, which starts in the West Midlands on 15 December 2026 and then moves through other English regions. The landlord register covers homes that are let. A holiday registration, if and when it starts, would be a separate filing. A lease can forbid short stays even where planning allows them. So can a mortgage. Those are private rules with the same practical effect as a statute.

Scotland is a licensing regime. New hosts have needed a short-term let licence before taking bookings since 1 October 2022, under the Civic Government (Scotland) Act 1982 order. Edinburgh has been a control area since 5 September 2022, and Highland’s Badenoch and Strathspey ward since 4 March 2024. In a control area, planning permission can be a condition of the licence for a change of use.

Wales is neither the London night-cap nor the Scottish licence. The Senedd’s visitor-accommodation Act received Royal Assent on 27 April 2026 and creates the framework for a licensing scheme, starting with self-catering. The Welsh Government’s own page states that the legal default is for that scheme to come into force in March 2030. Until it does, Wales is a planning and tax question, not an operating national licence. Northern Ireland is a fourth file. A cottage does not cross a border with its permission intact.

A loan written for a long residential let assumes a tenancy and a form of rent. A short stay may be outside that assumption. Some lenders have a specific product. Many do not. The valuation can ignore, or heavily discount, income that depends on nightly bookings. The offer can also prohibit the use, which makes a later switch into short stays a breach rather than a business plan.

Three documents have to agree, and they often do not. The mortgage offer says which use was priced. The planning position says which use is lawful. The contract with the guest says which use is actually happening. The English private tenancy, under the Renters’ Rights Act, is frequently none of those three. No interest rate is quoted. The research point is to keep the three files apart.

Guests wear a building harder than a single household, and they report it faster. Changeovers reveal damage that a long tenant would live with. Boilers, wifi and appliances are part of the product, not a background repair. Coastal weather, which is common in the places sold for this use, is a maintenance regime of its own: salt, damp, and a closed season in which the work has to be done.

An empty month is sometimes the only time to repair. That month is then lost to income as well as spent on the work. A condition report before the first guest records the boiler, the damp and the electrics. The view does not.

Demand is whoever is actually nearby, or able to travel, in that week. A national park edge draws leisure trips and is dead on a wet weekday. A city draws contractors, events and people between homes. London draws both, inside a night-cap. A weekend in Manchester, Leeds or Newcastle does not turn that city into a resort. The northern brief keeps those cities as places people work and study. Short stays there are a side use.

Local rules follow local pressure. Where a council thinks homes are being removed from the ordinary stock, licensing and planning tighten. Edinburgh’s control area is the worked example. Liverpool and Leeds need their own schemes read, not this one copied across.

The resale buyer is either another operator or someone who wants the building back as a house. The first group is smaller than the general buyer of homes. The second group may be blocked, or delayed, by a planning use, a licence, or a lease that assumed guests. Going back to a dwelling is not automatic where the use has become a material change: that is a planning question for the council, not a decision the seller makes by stopping the listing. A Scottish licence does not transfer as a piece of furniture. A London flat that has been used hard for ninety nights a year still has to satisfy a mortgage valuation as a flat.

Liquidity is therefore local and conditional. A cottage in a thin winter market can take longer to sell than a city flat, and a city flat tied to a short-stay business plan can take longer than the same flat with a normal tenant. This page does not estimate the wait. It says the wait is part of the holding.

The furnished holiday lettings regime was abolished for income tax and capital gains tax from 6 April 2025, and for corporation tax from 1 April 2025. HMRC’s manual says what that removes. For an individual, loan interest is no longer deducted in arriving at the profit: the residential finance-cost restriction applies, and the relief is a basic-rate tax reduction. New spending on furniture and equipment no longer qualifies for capital allowances. The capital-gains reliefs that treated the activity as a trade were withdrawn, and the income no longer counts as relevant UK earnings for pension relief. A company is outside the finance-cost restriction and still deducts interest in the ordinary way. The gap between a gross booking total and the cash an individual keeps is wider than the old holiday-let label implied. No rate is printed.

Transaction tax is a separate file, and it is not British in the singular. Stamp duty land tax covers England and Northern Ireland. Scotland and Wales have their own transaction taxes. Additional-dwelling rules can apply where the buyer already owns a home. Whether the building is on the council-tax list or in business rates is the night test published by the valuation authorities. In England that test is at least 140 nights available and at least 70 nights let over the last year, plus an intention to be available for 140 nights in the next. In Wales the published tests are higher: 252 nights available and 182 let. Those conditions are not the repealed holiday-let tests, and they are not a rate of tax.

None of this is a calculation for a particular owner. Residence, other income and how the building is held change the result. The research point is narrower: the tax label ‘holiday let’ no longer does the work it did before April 2025, and the bill is one of the items between gross and net.