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The traditional AST deductions that most landlords underestimate: A letting agent typically charges 10–12% of rent for full management. That’s £2,160–£2,592 per year before anything goes wrong. Add an average of 4 weeks of void periods annually — which cost £1,800 in lost income — and typical maintenance and compliance costs of around 3% of annual rent (£648), and the gross £21,600 becomes a net £16,632. That’s a 77p return for every £1 of headline rent.
The traditional AST deductions that most landlords underestimate: A letting agent typically charges 10–12% of rent for full management. That’s £2,160–£2,592 per year before anything goes wrong. Add an average of 4 weeks of void periods annually — which cost £1,800 in lost income — and typical maintenance and compliance costs of around 3% of annual rent (£648), and the gross £21,600 becomes a net £16,632. That’s a 77p return for every £1 of headline rent.
The Renters’ Rights Act makes each of these worse. Void costs are likely to increase as tenants now hold significantly more power to leave at short notice under periodic tenancies. Compliance costs increase with the new Decent Homes Standard and the forthcoming PRS database requirements. And any rent dispute goes to tribunal — adding legal cost and time on top.
“The landlord who stays on a traditional AST at £1,800 per month takes home approximately £1,386/month net. The same property under professionally managed short-let earns approximately £3,200/month — with no agent fees, no voids, and no management overhead.”
Compare this to a professionally managed short-let on the same property. At 80% occupancy — a conservative target for a well-presented Zone 2 flat — and a modest dynamic pricing average of 1.8× the AST weekly rate, monthly gross revenue is typically £3,000–£3,600. There are no agent fees (the management fee is built in and covers all operations). No void periods — because void risk is absorbed by the management company. No compliance overhead beyond the initial setup. Net income to the landlord: approximately £3,200/month.
For landlords on the Guaranteed Rent model, the comparison is even cleaner: a fixed monthly payment, guaranteed regardless of occupancy, typically 5–10% above the local AST market rate, with all management, maintenance, insurance, and compliance handled by the management company. The uncertainty that the Renters’ Rights Act introduces to traditional letting is simply absent from the equation.
The honest caveat: Not every property makes a strong short-let. Natural light, presentation, location, and property type all affect performance. Properties that are poorly presented, in outer zones, or in locations with low tourist or corporate demand will underperform. A realistic income assessment — one that tells you the honest figure for your specific property — is worth more than any industry average.
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