How To Stay Competitive In London Using The Right Rental Pricing Strategy

Having the right rental pricing strategy will help property owners maximise revenue, reduce vacancies, and sustain profitability in London’s evolving and competitive market. The price should balance market demand, operating costs, regulations, and guest expectations, while also adjusting to different letting strategies (short-, mid-, and long-term).

Key Takeaways:

• A successful rental pricing strategy should balance demand, costs, regulations, and guest expectations to stay competitive in London’s rental property market.
• The evolving London rental market requires pricing flexibility rather than fixed rates. 
• Different letting strategies have varying pricing objectives and should thus follow different pricing techniques.
• Dynamic pricing helps maximise occupancy, profitability, and long-term property performance.
• Professional property management uses real-time market data, technology, and operational expertise to optimise rental prices year-round.

Why London Landlords Should Use The Right Rental Pricing Strategy

Pricing a rental property in London has become more complex than simply matching the average price of neighbouring listings. London’s Private Rented Sector (PRS) continues to evolve due to new legislation, rising operating costs, changing guest behaviour, and growing tenant protections. If you want your rental property to stay competitive, you need to consider more than the seasonal demand when setting your rates, especially when you’re using a flexible letting strategy.

A rental pricing strategy is a structured process for setting and adjusting rental prices that maximises long-term revenue. It is based on real-time data, including market demand, local regulations, operating costs, seasonality, and property performance.

It doesn’t matter if you’re operating a short-term holiday let, targeting corporate guests for mid-term stays, or securing long-term tenants. Your pricing strategy will affect occupancy rates, profitability, and long-term returns.

At City Relay, we’ve always opted for a dynamic pricing strategy. We’ve found that it works best in London’s flexible letting market because it helps property owners adapt to changing demand while protecting the long-term performance of their real estate assets.

Why setting the right price matters now

London’s rental market remains one of the most competitive in Europe. This demand is one reason you need to be smart about your rental pricing strategy. It’s not enough that you maximise your property’s earning potential. You should also protect it by navigating recent regulatory changes without compromising profitability.

The Renters’ Rights Act (RRA), 90-day rule for whole-home short-lets, evolving energy efficiency requirements, and increasing operational costs should be considered when landlords choose their pricing strategy.

At City Relay, we don’t price properties the same way. Our dynamic pricing strategy considers multiple factors, including:

• Local supply and demand
• Corporate relocation activities
• Seasonal events
• Tourism and business travel
• Utility costs
• Interest rates
• Inflation
• Compliance requirements
• Guest expectations
• Property quality and condition

Looking into these helps us continuously adapt prices to reflect the changing market conditions while maximising the rental potential of the properties in our portfolio.

The key to setting a competitive pricing strategy

Setting a competitive rental pricing strategy is not about offering the lowest price. It’s about finding the rate that maximises occupancy and profitability without undervaluing the property.

We noticed that if a property is priced too high, vacancy increases. If it’s priced too low, it compromises revenue and creates a perception of lower quality. We also found that properties consistently perform better when pricing decisions are reviewed dynamically rather than remaining fixed year-round.

This is why we use a rental pricing strategy that responds to a property’s booking pace, demand patterns, and local market activity. It positions the property to maintain strong occupancy while protecting revenue through premium rates, especially during high-demand periods.

Pricing Strategies For Flexible Rental Properties

Dynamic pricing is the practice of continuously adjusting rental prices based on changing market conditions, and not using fixed rates throughout the year.

When we use dynamic pricing strategies at City Relay, we combine more than a decade of London market experience with live booking data, seasonal patterns, local demand trends, and operational insights. This is how we set the most competitive rate for the property in our portfolio, regardless of the booking cycle.

Not only that, but we also use different pricing strategies for short-, mid-, and long-term rentals, since each model serves a different set of guests or tenants and operates under different regulations.

How to price a short-term rental

Short-term lets are rented for 1 night to 3 months. Our pricing strategy revolves around maximising RevPAR (revenue per available room) while keeping to London’s 90-day limit.

• Using dynamic pricing. Demand for short-term rentals changes daily, influenced by travel trends, seasons, weather, events, and even airline schedules. Instead of maintaining fixed night rates, we use automated pricing systems that respond to changing market conditions, keeping properties competitive without manual adjustments. By combining technology with local pricing data, our properties can respond quickly to demand spikes while avoiding unnecessary discounts during slow periods.
• Maximising value within the 90-day rule. Short-lets in Greater London can only be rented as a whole home for 90 nights per calendar year, unless the owner obtains planning permission to exceed this limit. Since availability is restricted, we prioritise premium rates during peak demand and switch to moderate prices during off-peak periods to maximise annual revenue.
• Pricing around London’s event calendar. Demand for London short-lets fluctuates around events such as Wimbledon, London Fashion Week, Wembley concerts, ExCeL London exhibitions, and various sporting events and cultural festivals. Beyond the peak summer tourist season, we also monitor local events to ensure nearby properties can capture premium pricing as local demand increases.

How to price a mid-term rental

Mid-term stays run from 3 to 6 months. Our pricing strategy seeks to capture the premium corporate demand while maintaining flexibility around the 90-day limit of short-lets.

• Finding the corporate pricing sweet spot. Mid-lets hold a unique position between short-lets and long-lets. It has the stability of long-lets but can command premium rates by offering a partially or fully furnished property. This means it includes basic furniture, Wi-Fi, council tax, and sometimes even utilities. We found that this creates a balance between occupancy and yield.
• Aligning pricing with corporate demand. The demand for corporate mid-lets increases around international transfers, new graduate recruitments, infrastructure projects, and university terms. Pricing and availability anticipate these demand peaks to get early bookings. For instance, we prepare suitable properties ahead of September and January, when relocation activity typically increases.
• Including utility buffers. Mid-lets, just like short-lets, include utilities in their rates. Energy costs, broadband fees, water charges, and even council tax should be incorporated into the pricing to protect profitability throughout the mid-term stay. Calculate a buffer into the monthly rate to avoid absorbing future price increases.

How to price a long-term rental

Long-term agreements under the Renter’s Rights Act (RRA) have a minimum 12-month stay where the landlord can’t evict a tenant within the first 12 months. However, the tenant can choose to leave at any time, as long as they give the landlord 2 months’ notice. Our pricing strategy secures reliable income while encouraging long-let tenant retention.

• Setting realistic prices based on achieved rental values. Our long-let prices are based on achieved rental values from local properties. This creates a more realistic pricing that attracts qualified tenants while minimising vacancy periods.
• Balancing affordability with market value. Rental rates should reflect local demand and tenant affordability. Pricing above local income levels lowers the pool of suitable applicants and could increase tenancy risks. A sustainable tenancy produces greater long-term returns than repeatedly remarketing a vacant property.
• Prioritising retention under the RRA. As tenant protections increased and Section 21 no-fault eviction ended under the RRA, retaining good tenants is more valuable than ever. We’ve found that landlords who enjoy longer tenancies, fewer void periods, and lower re-letting costs are those who focus on adopting measured rent reviews based on market evidence, and not aggressive increases.

Did you know…

According to the UK Private Rent and House Prices for June 2026 from the Office for National Statistics, a property sitting vacant for just four weeks in London could lose almost £2,300 in rental income.

Use An Effective Rental Pricing Strategy

Having an effective rental pricing strategy means balancing changing regulations, operating costs, guest expectations, and evolving demand across multiple rental models. Dynamic pricing enables you to respond confidently to these changes while protecting your property’s occupancy and profitability rates.

At City Relay, we’ve spent more than a decade refining our pricing strategies, specifically for London’s flexible letting market. We’ve learned to combine advanced pricing technology with local expertise and real-time market data to help property owners maximise rental revenue across different letting strategies without compromising long-term asset performance.

If you want to understand how your property could maximise its revenue through the right rental pricing strategy, we’d love to give you a personalised assessment.

Get a free rental estimate now.