Short-term rental trends in London continue to evolve. It’s shaped by stricter laws and regulations, shifts in the economic conditions, new travel preferences and changing population dynamics.

Whether it involves pre-pandemic behaviour, government intervention, rising property costs or volatile demand for accommodations, navigating the short-term rental sector can be challenging for landlords.

This is why we’re cracking down on the latest trends to serve as a guide for your next steps. We’re halfway through the year, and it pays to stay updated so you can pivot or realign your strategies and improve your property’s performance before the year-end.

In this article, you’ll discover the core factors that influence short-term rental trends and how you can use them to identify emerging opportunities in the market. Get actionable tips to maximise your rental income during the second half of 2025.

Factors Affecting Short-Term Rental Trends in London

Before exploring the short-term rental trends, it’s essential to understand the factors that influence them. It’ll give you insight into how these trends emerge, so hopefully, you can stay a step or two ahead. Doing so will help you implement strategies that’ll help you get more bookings.

So, what’s been going on in the London rental market?

The rental landscape in London has undergone significant shifts over the years. Tighter regulations (e.g. 90-day limit) and higher rental prices are reshaping the private rented sector.

The looming Renters’ Rights Bill, although it primarily affects the long-term rental sector, is still something that property owners should consider. This bill will affect notice evictions and pet-friendly accommodations, among others. These factors will influence the movement of the market and the demand dynamics between short-term and long-term rentals.

In terms of growth, the rental market has generally seen a 21% increase in rental prices over the past three years. It’s a tremendous growth compared to the 4% increase in house prices. This makes renting more unaffordable, especially in the city of London. This is putting pressure on the short-term rental market because locals are demanding that more housing options be made available for long-term renting.

However, the London authorities understand that they can’t put a lid on the short-term rental market. The city’s 16 million visitors per year will always need temporary accommodations.

All these are shaping the new trends emerging in the short-term rental market.

What Are the Latest Trends in the Short‑Term Rental Sector?

Considering your knowledge of the London rental market, what implications does this have for short-term rental owners?

For one, the competition in the shortlet sector remains high, as demand and revenue potential continue to attract property investors. However, you can expect the government to impose stricter regulations to ensure that landlords are held accountable and their short-term rental properties meet the required standards.

With this in mind, let’s take a look at the latest trends in the short-term rental market.

Unique stays and niche accommodations

Travellers are not just looking for temporary accommodations. They are looking for unique experiences. Market data indicate that unique properties are currently in high demand as they enjoy higher nightly rates and better occupancy rates.

While this could refer to properties with incredible views or unconventional shapes (e.g., A-framed cabins, treehouse accommodations), it could also mean quirky interior designs.

So if your property is in a typical location, you can still provide guests with a unique experience through thematic designs. Paint the walls and select furniture and decor that evoke a country feel or a Scandinavian look. Use high-end amenities to elevate the guest’s experience during their stay.

Luxury experiences and premium rentals

Apart from unique stays, guests are also looking for luxurious experiences. Reports reveal that luxury tourism is on the rise. This goes beyond prime locations or high-end finishing and decor. You need to provide high-value amenities like hot tubs or gym access.

Personalised services and high-tech features can also contribute to a luxurious short-term rental experience. Offer add-on services, such as a VIP transport experience or luxury guest transfer.

Sustainable and eco-friendly environments

Sustainability is still a trend and eco-conscious travellers prefer to stay in eco-friendly environments. Survey reveals that travellers are willing to spend 27% to 34% more for sustainable stays.

Make your property offer sustainable features and highlight these in your listing. Mention your property’s energy efficiency, including tall windows that let in a lot of natural light, solar panels and a private balcony with lots of plants.

Partner with an eco-friendly supplier for your toiletries and other amenities. Get green certifications and mention this in your property listing as well. When combined, these will make your short-term rental more appealing to eco-conscious guests.

Smart tech and automation

Boost the smart tech in your rental property to elevate the guest experience. There’s a growing preference for a contactless guest experience and this is possible through innovative technology such as smart locks, voice assistants and automated thermostats.

Check out AI tools to make pre-booking and guest inquiries efficient. Some tools feel personalised even if AI powers them. This will enhance the guest experience and make the booking process convenient.

Look for innovative technology and integrate it into your property to elevate the comfort of your guests. The more you impress your guests, the better the chance of getting positive reviews and repeat bookings.

Pet-friendly and business-ready

Demand for pet-friendly and business-ready accommodations is high.

Reports reveal that only 1 out of 10 rental properties is considered pet-friendly. If you position your property to cater to pets, you can attract more bookings from pet lovers. Offer pet-friendly amenities like a bed and food bowls. You can make this available always or you can offer this as an add-on feature.

Business travellers are also increasing in London, as well as the demand for remote work facilities. If you can add a home office in your property, even if it’s just a simple desk and chair, you can make the property appealing to digital nomads.

How Can You Maximise Rental Income Based on Trends?

Now that you know the short-term trends in London, how can you maximise your rental income in response to this information?

Here are tips you can act on:

• Update your listing. Highlight the right features in your property  listing so it aligns with the latest short-term rental trends.

• Install smart tech. If you haven’t yet, it’s time to install innovative technology in your home like smart locks, automatic thermostats and energy monitors. Not only will this make your property comfortable and convenient, but it can also help you stay sustainable and energy-efficient.

• Check new markets. Review guest preferences and see if there are markets you can tap into for more bookings. If your property is used to catering families or couples, you could attract business travellers or digital nomads. Just add a home office and free WiFi to make it appealing.

• Stay compliant. The short-term rental regulations are constantly evolving. Keep an eye on these changes so you can stay compliant. You should also monitor existing safety checks and make sure you’re updated and compliant with local council rules.

Stay Ahead with London’s Short-Term Rental Trends

The London short-term rental market is rapidly evolving due to layered regulations, shifting guest preferences, new proptech innovations, and other factors. The more you know about the current standing of the market, the more you can take advantage of opportunities before the rest of your competition can.

Monitoring the short-term rental trends is just one of the many responsibilities property hosts should take care of. You also have to manage the rental property, communicate with guests, make sure their experience is memorable and stay compliant.

If it all feels overwhelming, you can always partner with a property management company like City Relay. Our experienced team will ensure your property can capitalise on emerging trends in the market. You’ll be alerted to new regulations to stay compliant and maximise your rental income.

Are you ready to stay ahead of the short-term rental trends? Get a free rent estimate now.