Serviced accommodation in the UK: a landlord's guide

Serviced accommodation is the most operationally demanding way to let a residential property in the UK, and since April 2025 it is also the least tax-advantaged it has been in two decades. Nightly rates can still produce two to three times the gross income of a standard tenancy in the right location, but the reliefs that once made the model work on paper have gone, management costs run at roughly double a long let, and England's mandatory register arrives by March 2027. This guide covers what the model actually involves, what it costs to run, how it is taxed now, and how to judge whether it fits a particular property.

What counts as serviced accommodation

Serviced accommodation covers any furnished, self-contained residential property let on a short or medium-term basis with hotel-style services included in the price, typically cleaning, linen, utilities and broadband. The formal definition, and the boundary between serviced accommodation and a plain short-let, sits in our dictionary entry on serviced accommodation.

Four formats dominate in practice. A serviced apartment is a self-contained flat let nightly or weekly, usually in a city centre and usually marketed to business travellers. An aparthotel is a purpose-built block of such apartments operated as a single business, with a reception and shared facilities. Corporate housing is a house or flat let to an employer for staff on secondment, relocation or a project posting. Where the guest is a business rather than an individual, the arrangement is usually structured as a company let. And an Airbnb-style whole unit is the same product sold through an online travel agent to leisure and business guests interchangeably.

What unites them is that the occupier is a guest, not a tenant, and the operator retains control of the property between stays. That is the line that determines which rules apply, and it matters more than what the listing is called.

How it differs from a standard tenancy

The difference is not the length of stay. It is who controls the property and what the occupier holds.

A guest in serviced accommodation holds a licence to occupy, so none of the protections a tenant gained under the Renters' Rights Act 2025 apply to them. There is no assured periodic tenancy, no statutory notice period and no deposit protection duty. That cuts both ways: the operator carries no possession risk, and also has no guaranteed income.

The income gap is what draws most landlords in. A property earning £800 a month as a tenancy might gross £2,000 to £3,000 a month as well-run serviced accommodation in a strong location. That figure is gross, it assumes high occupancy, and it is before the costs set out below. It is one of several routes a landlord can take with the same building, and it sits at the operational end of the range set out in our guide to property investment strategies.

The three ways to run serviced accommodation

Most operations use one of three structures, and the choice determines how much capital and how much time the model demands.

Own and self-manage. You own the property and handle listings, pricing, guest communication, changeovers and maintenance yourself. This keeps the whole margin and costs the most time. From working with self-managing landlords across the UK, this is the structure most people start with and the one they most often abandon, usually at the point where changeovers start clashing with a day job.

Own and appoint a management company. The operator handles bookings, cleaning, pricing and guest support for a percentage of revenue. Management runs at 15 to 25 per cent of revenue rather than the 8 to 12 per cent a long let attracts, a gap our guide to property management costs sets out in detail.

Rent-to-serviced-accommodation. Taking a lease on someone else's property and running it as serviced accommodation is the lowest-capital route in, and the one with the most ways to go wrong, which our rent-to-rent guide covers in full. The head rent is payable whether or not the unit is booked, and the arrangement fails outright if the owner's mortgage or lease prohibits subletting.

What it costs to run

The headline nightly rate survives contact with a spreadsheet far less well than most first models assume. Six costs do the damage.

Changeover cleaning and laundry run at roughly £70 to £120 per stay, and a unit turning over every three nights incurs that ten times a month. Platform commission takes 3 to 18 per cent depending on the channel and whether the booking is instant. Management, if used, takes another 15 to 25 per cent. The operator pays utilities, council tax or business rates, and broadband year-round, including on unbooked nights. Furnishings wear out faster and are replaced on a three to five year cycle rather than a decade. And occupancy, not rate, is the variable that decides the outcome: a unit at 45 per cent occupancy earns roughly half what the same unit earns at 85 per cent, while carrying almost identical fixed costs.

Model both options on your own figures before committing, because the answer changes with occupancy more than with nightly rate.

The tax position since the furnished holiday lettings regime ended

Income from serviced accommodation is taxed as ordinary UK property income. The furnished holiday lettings regime was abolished by the Finance (No. 2) Act 2024, with effect from 6 April 2025 for income tax and capital gains tax and 1 April 2025 for corporation tax. The 2025/26 tax year, the return for which is due by 31 January 2027, is the first to fall entirely under the new rules.

Until April 2025 a qualifying operation could be treated as a furnished holiday let, which carried a set of reliefs no longer available: full mortgage interest deductibility, capital allowances on furnishings, Business Asset Disposal Relief on sale, and profits counting as relevant earnings for pension purposes. All four have gone. Mortgage interest relief is now restricted to a basic-rate 20 per cent tax credit, the same restriction every other individual residential landlord has faced since 2020.

Two reporting points follow. Booking platforms have reported host earnings directly to HMRC under the digital platform reporting rules since 2024. And serviced accommodation income counts towards the Making Tax Digitalqualifying income threshold, which is £50,000 from April 2026 and £30,000 from April 2027.

Business rates rather than council tax apply in England only where the property was available for letting for at least 140 days and actually let for at least 70 days in the previous 12 months. Properties falling short stay on council tax, where most councils now apply a second-home premium of up to 100 per cent. What that change did to the numbers, and whether incorporation restores any of it, is worked through in our guide to the holiday let tax changes.

Serviced accommodation regulations across the UK

The regulatory position differs in every UK nation, and England is the one about to change.

England. There is no short-term let licence or register in force today. A mandatory national register, legislated for under the Levelling Up and Regeneration Act 2023, is due to be fully operational by March 2027, confirmed by the Culture Secretary in Parliament on 3 September 2026. Operators will hold a registration number and display it on listings. Secondary legislation is still required, and the fee, data fields and registration frequency are not yet confirmed. The scheme turns on how a property is let rather than on the level of service provided, so it will cover serviced accommodation as well as holiday lets. The detail sits in our entry on the register of short-term lets.

Greater London. Letting a residential property as temporary sleeping accommodation without planning permission requires two conditions to be met: no more than 90 nights in a calendar year, and at least one of the people providing the accommodation must be liable for council tax at the property. Both come from section 44 of the Deregulation Act 2015. Missing either condition means a material change of use requiring borough permission.

Planning outside London. There is no statutory night cap. Intensive letting can amount to a material change of use, decided by the local planning authority on the facts. A C5 use class for short-term lets has been consulted on but no statutory instrument has been laid in England, so it is not in force. Some councils have made an Article 4 direction that removes permitted development rights locally.

Scotland, Wales and Northern Ireland. Scotland has licensed short-term lets since October 2022, with existing hosts required to hold a licence from October 2023. Wales is introducing a visitor accommodation register from October 2026, and has operated dedicated C5 and C6 planning use classes since October 2022, which is the usual source of the mistaken claim that C5 already exists in England. Northern Ireland requires tourist accommodation to be certified by Tourism Northern Ireland.

Registration in England will require declarations that existing safety obligations are met, which means gas, electrical and fire safety records need to be current and findable rather than assembled in a rush. In our experience supporting landlords through the Renters' Rights Act transition, the paperwork, not the registration step, is what runs people out of time. Keeping certificates and renewal dates in one place is the part worth doing now.

Mortgage, lease and insurance consent

Most residential and standard buy-to-let mortgages prohibit short-term and serviced letting outright, so a specialist product or explicit written lender consent is needed before the first booking. Leasehold flats frequently ban short-term letting in the lease, and breaching that covenant can put the lease itself at risk. Standard landlord insurance does not respond to a serviced accommodation claim, because the risks are different: high guest turnover, public liability for people who are not tenants, and contents exposure. A specific serviced accommodation or holiday let policy is required.

Landlords consistently underestimate this stage. Consent is treated as paperwork to sort out later, when it is the first thing a lender or freeholder checks once a neighbour complains, and the point at which an otherwise sound operation can be shut down overnight.

Is serviced accommodation worth it?

For most residential properties, no. For a minority, decisively yes.

The model works where three conditions hold together: sustained demand that is not purely seasonal, from a tourist, business, events or hospital catchment; a property that is self-contained, well-presented and in the right location within that catchment; and an operator with either the time to run it or the margin to pay someone else to. Take any one away and the numbers usually favour a standard tenancy.

It works badly for a mortgaged city flat competing against saturated platform supply, for anywhere with a second-home council tax premium and low occupancy, and for leasehold blocks where the lease is restrictive or neighbours are hostile. Regulatory risk compounds this: the direction of travel across all four UK nations is towards more registration, more planning control and less tax advantage, and a model that only works on today's rules is fragile.

The pragmatic position many landlords land on is a mixed portfolio, one or two serviced units alongside standard lets, so that regulatory or seasonal shocks to one model do not take the whole income with them. That does mean running two different compliance regimes, two income patterns and two sets of records at once, which is easier with one view across a mixed portfolio than with separate spreadsheets.

How to start a serviced accommodation business

Six steps, in order, because the sequence matters more than the speed.

1. Confirm you are allowed to. Check the mortgage terms, the lease if leasehold, and the local planning position including any Article 4 direction. Get lender and freeholder consent in writing before anything else.

2. Model the numbers on realistic occupancy. Use a conservative occupancy figure, not a peak-season one, and include changeover costs, commission, management, year-round utilities and furnishing replacement.

3. Sort the safety position. Gas safety certificate, electrical installation condition report, interlinked smoke and carbon monoxide alarms, and a fire risk assessment appropriate to the property.

4. Get the right insurance. A serviced accommodation or holiday let policy, not a standard landlord policy.

5. Decide the operating model. Self-manage, appoint a management company, or lease from an owner. Price the management cost in from the start rather than treating it as a later option.

6. Prepare for registration. Keep ownership, safety and planning records organised now, ahead of the March 2027 register, rather than waiting for the final guidance.

Frequently asked questions

Is serviced accommodation the same as Airbnb?

No. Airbnb is a booking platform; serviced accommodation is the type of letting. A serviced unit may be listed on Airbnb, Booking.com, Vrbo, a direct booking site, or let to corporate clients without appearing on any platform. The planning, registration, tax and safety rules turn on how the property is used, not on where it is advertised.

How long can a guest stay in serviced accommodation?

Anywhere from a single night to several months, and the length of stay does not by itself change the legal character of the arrangement. What matters is whether the occupier has exclusive possession for a term at a rent, which would create a tenancy, or a licence to occupy with the operator retaining control, which does not. Long corporate bookings are usually structured as company lets for precisely this reason.

Do I need planning permission for serviced accommodation?

In Greater London, yes if you exceed 90 nights in a calendar year or if you are not the council tax payer at the property. Outside London there is no night cap, but intensive letting can be a material change of use that the local planning authority decides case by case, and an Article 4 direction may remove permitted development rights in your area. Check with the council before your first booking rather than after a complaint.

Is serviced accommodation still profitable after the tax changes?

It can be, but the case now rests on operational returns rather than tax treatment. The reliefs that once made a mortgaged unit work have gone, so profitability depends on occupancy, location and keeping management costs under control. Run the numbers on both models before committing, and if you decide to keep a mix of serviced and standard lets you can start for free and track rent, documents and compliance for the whole portfolio in one place.

Disclaimer: This article is a guide and not intended to be relied upon as legal or professional advice, or as a substitute for it. August does not accept any liability for any errors, omissions or misstatements contained in this article. Always speak to a suitably qualified professional if you require specific advice or information.