Short-term Tenancy vs Long-term Tenancy : What’s the difference?

At first glance, the difference between short-term tenancies and long-term tenancies may seem obvious. At a very basic level, it is. At a deeper level, however, there are significant differences between the two approaches.

Here Mark Burns, Managing Director of Portfolio8, shares a quick guide to the main differences between long and short term tenancies.

Frequency of turnover

Legally, a short-term tenancy can last up to 6 months. There are some markets where short-term tenancies of several months are fairly common. For example, in student towns, people may study or teach for a term or semester. In general, however, short-term lets are more likely to be used in the same way as hotels. People will stay for a few days to a couple of weeks.

With long-term tenancies, people may stay for years. At a bare minimum, you can expect your tenants to stay for 6+ months.

Laws and regulations

Short-term and long-term lets are both highly regulated but in very different ways. Short-term lets are classed as commercial property. They are therefore regulated in much the same way as businesses in general. 

It’s now fairly common for short-term lets to need to be licensed in some way by the local authority. When a licensing application is submitted, the local authority will assess the short-term let’s impact on the neighbourhood. 

If the local authority is happy that the impact will be neutral or beneficial, the licence will be granted. The business will, however, be monitored to ensure that it operates in a healthy and safe way. If it is found not to, its licence may be revoked. In some cases, further sanctions may be applied.

Long-term lets are, of course, businesses but they are treated very differently in law. There may be a requirement to register them (especially for HMOs). It is, however, extremely unlikely that permission to run them would be refused (except, possibly for HMOs). 

Properties used for long-term lets must not only be kept safe but also achieve minimum energy efficiency standards. The tenants in them have a much higher level of legal protection than renters in short-term lets. In particular, landlords can only require them to vacate the property if they have satisfied all relevant, legal conditions.


Short-term lets can be hugely profitable. There are, however, three significant caveats to this. Firstly, the profitability of a short-term let often depends hugely on your marketing skills. 

Secondly, there is generally a lot more work involved in managing a short-term let than there is in managing a long-term let. The cost of this needs to be factored into your considerations.

Thirdly, the market for short-term lets is much more vulnerable to disruption than the market for long-term lets. For example, when COVID-19 was at its peak, there was basically no market for short-term lets. There was, however, still high demand for long-term lets.

With that said, when travel restrictions eased, short-term lets were hugely in demand and their prices reflected this. Long-term lets, by contrast, largely stayed on their regular course. 


If you are buying a property that is already in use as a short-term rental or a long-term rental, then financing is fairly straightforward. In the former case, you need a mortgage for a commercial property. In the latter case, you need a buy-to-let mortgage on a residential property.

The challenge comes if you want to buy a residential property and convert it into a short-term rental. In this situation, you would need to apply to the local authority for permission to change the use of the building. No matter how good your case is, there is no guarantee that this permission will be granted. This could make it very challenging to get financing.

Technically, the same is true if you want to convert a short-term let into a residential property. Realistically, however, the risk here is much lower. It’s highly unlikely that a local authority would object to a commercial property being converted into a place for people to live.


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