Should I buy flat in London that I let out for 90 days a year to cover costs?

[Notthehill]

I have moved abroad from the UK but am thinking of buying a tiny flat in London that I and other family members could use when visiting London. As I will be selling family home, I won't need a mortgage to do this. I would like to let the flat for up to 3 months a year (as one or two short lets, not an Air BnB situation). This would hopefully help pay some of the running costs of the flat. Does anyone have experience of how realistic short lets are in London (under 90 days) and is this a crazy idea?

It’s not crazy but location is paramount. You’ll need someone to manage it and do the changeovers and deal with any issues. I found booking.com better than Airbnb.

Thanks. Any tips on location. Was thinking Earl's Court or Hammersmith for ease of transport to Heathrow? Do you do nightly stays? I'm worried any place I buy won't allow that, hence looking at short term lets of at least a month.

Best to get a flat with Share of Freehold. If you are one in a block of 3 flats, then the others would notice more frequent visitors and may not like it.
However I have always advised never buy in a big block as if there are problems e.g a leak from the above flat, it's not always easy to find the freeholder.

If you're looking to rent in blocks, you'll need to be close to where contractors work and price according to profession. That could be visitors at one of the universities or hospitals, or project-based people in construction type roles. There will be a market elsewhere, like visiting foreign grandparents, renovators and new arrivals searching for permanent accommodation, but it might be harder to let and they might want bigger and cheaper.

You will need to check the lease very carefully. Leaseholds can have restrictions on short term lets, a block of 4 I had the freehold for (and was also a leaseholder) was it can only be let to one family unit on a minimum of 6 month let. I didnt write this clause, it was written in the 70s when the leases were drawn up.

Be warned even if allowed by the lease, you may end up pissing off all the other people in the block of flats with constant new people coming in and out, maybe making a lot of noise etc...... this doesnt make for cordial neighbours!

Oof here we go.
Its fine IN THEORY.
In reality....
Gov legislation is now stacked against you. Leasehold are often problematic, theres council tax on 2nd homes, stamp duty
...
long term it wont yeild big bucks...
In reality price will stay about flat or start to drop. anyone who bought and sold in london since 2019 is very lucky if they managed to wipe their face.

Lets Just say it 500k....

500k invested in s&p 500 last year would have made between £53,200 - £65,200 depending on tax band.
And thats using a bog standard financial vehicle product that has no tax sheltering or tax relief....
My ifa made me 14.3% Post fees and tax in 2025 ....which on 500k would be 71.5k on 500k investment

You'd have no maintainance and when you went to london could stay anywhere you liked youd have 50k pa to play with.

Conversely 500k in property you'll have stamp duty council tax utilities and maintenance and some rental income to top it back up / make profit on.

3 months income isnt going to bring in that much and central london property isnt appreciating any time soon.

Chatgpt says "you might take home roughly £6k–£8k after tax and costs on a 90-night Airbnb run per year."

You would be completely mental to do this. Invest your funds and pay for Airbnb when you visit London. You would therefore have zero service charges, council tax, utilities, insurance, income tax, maintenance costs, costs for housekeeping between tenants, furniture and other contents (which need replacing), cleaning and legal costs.

Have you looked into how much you would pay an agency to clean every single day after 1-night stays? Washing linen and towels every day? It will be way more than you think. And is it fair on the neighbours? They could quickly end up hating you if it becomes a party flat every night. I wouldn't do it.

Salmon summarises this perfectly! I really would not buy a flat in London these days, years ago yes but not now

Good points, London property is a very risky investment now.

It is certainly a very poor idea compared to investing sensibly.

Thank you everyone! Really good points, especially @SalmonOnFinnCrisp

But if I may be devil's advocate....

1. I'm not doing this as an investment to make money. This would be a bit of a luxury - having a base in London that I would use two or three months a year, plus my adult children and my brother and sister could use. My hope would be to break even.
2. I wouldn't own any other property in the UK - or anywhere on earth in fact - so council tax and stamp duty wouldn't be extortionate. And even though London property is currently in a dire slump, this would at least give me some diversification. And it can't be in slump forever, can it (eek?!!).
3. I would only accept lets of at least a month. So not AirBnb. The idea would be not to antagonise my neighbours. I know this would mean earning lower rents, but just want to make a bit of cash to help with the running costs, service charge etc. I would also let it out to friends at a cheapish rate occasionally.
4. It would definitely be more cost effective to invest the money and stay in a nice rental for a couple of months each year, I realise. But it would be so nice to have a London flat and, as mentioned, for my offspring and siblings to have this.
5. Thanks for your suggestions @Paaseitjes - that's what I have in mind. Renting to eg academics or visiting workers for between one and three months. Ideally I'd rent it June-August each year or mid Sept-mid Dec.
6. The biggest problem I foresee is finding a freehold flat that allows me to let it out for short lets - will this be like finding a needle in a haystack?

But .... with incoming Renters' Rights Act, will it be possible to let a flat for only three months?

No! All tenancies will be “rolling” under RRA with no fixed terms allowed. You would be very much relying on trust that your tenants would move out after 3 months. The only way you can evict is for rent arrears or if you want to live in or sell the property. That requires 4 months notice.

Don’t forget you need planning permission short lets now in London: https://www.london.gov.uk/programmes-strategies/housing-and-land/buying-and-owning-home/guidance-short-term-and-holiday-lets-london

Thanks, but that's if I'm letting it for over 90 days, right? Which I wouldn't.

Is my only option to use a platform like AirBnB or Booking.com but set the filter to only allow lets of 30 days or more? Someone suggested Openrent.co.uk which allows you to advertise rentals as short as one month? Anywhere else? Thanks everyone! Very grateful for everyone's experience.

Did you see the info about renters rights act?? You cannot specify the length if a tenancy unless you are officially a “holiday let” which may have additional hoops to jump through and huge expenses as detailed prior. Honestly, invest your cash and use the interest to stay at the Savoy while in London and I guarantee you will still be better off financially

Yes I did, but short term/holiday lets via AirBnB etc that add up to under 90 days aren't covered by the renters' rights act. There are no additional hoops. I would only accept bookings for a month at a time so limited faffing with changeovers. Agree, not a great money-making scheme - am now leaning slightly against buying😥

For RRA not to count you need to register as a holiday let - local authorities often have other requirements for this eg fire alarms hard wired, fire doors etc. Your costs would be huge - and unless you have a reliable black book of tradesmen eg plumber, electrician, locksmith etc you would need to pay someone to manage the property in your absence. And someone to go shopping for new pans, plates, bedding after they inevitably get damaged, and a carpet cleaner for spills and dry cleaner for curtains. Plus expensive specialist insurance …….ad infinitum.

Personally, no keep your money invested. Letting Property is fiddly, you may get a dodgy tenant. The government is increasing regulations.

I cannot find any need to register with local authorities in the info provided; I don't think that exists: www.london.gov.uk/programmes-strategies/housing-and-land/buying-and-owning-home/guidance-short-term-and-holiday-lets-london
Yes, fire and gas safety inspections, though I'd do that anyway. But I do understand your general point that my costs would be huge, thanks.