Airbnb yield: estimating short-term rental income in the UK
Short-term lets promise higher returns, but estimating real income is harder than it looks. Here is how to do it properly.
The UK short-term rental landscape
In London, the 90-day rule limits short-term letting of entire properties to 90 nights per calendar year without planning permission. From 2025, a national registration scheme requires all short-term rental hosts in England to register. These regulations do not make STR unviable, but you cannot assume unlimited availability when projecting income.
STR yield vs long-term rental yield
A property renting for £1,500/month on an AST might generate £100-£150 per night on Airbnb. But no property achieves 100% occupancy (typical: 55-80%), and the cost structure is fundamentally different. The honest comparison is gross revenue minus all operating costs vs net rental income from a long-term tenancy.
The metrics that matter
Average Daily Rate (ADR): The average price per night across all booked nights. Not your listed price -- what guests actually pay after discounts and seasonal adjustments.
Occupancy Rate: Percentage of available nights booked. Highly seasonal -- coastal properties might see 90% in summer and 30% in winter.
Revenue Per Available Room (RevPAR): ADR multiplied by occupancy rate. The single most useful metric because it captures both pricing power and demand.
Estimating revenue realistically
Basic formula: ADR x Occupancy Rate x 365 = Gross Annual Revenue. But gross revenue is not profit. Costs include:
Cleaning: 15-20% of revenue. Every changeover needs a professional clean.
Platform fees: Airbnb charges 3% (or 14-16% under simplified pricing). Booking.com takes 15%.
Furnishing depreciation: £1,500-£3,000/year on a typical 1-2 bed property.
Management: 15-25% of gross revenue if using a management company.
Utilities: You pay all bills -- gas, electric, water, Wi-Fi.
After all costs, realistic net margin is 40-60% for self-managed and 25-40% for professionally managed properties.
Seasonality and location
Coastal and rural properties see sharp peaks in school holidays with significant winter troughs. City-centre properties are more stable, driven by business travel and year-round tourism. Understanding the seasonality of your specific market is essential for realistic projections.
MarketCode holds no short-term rental data. For the same property it can tell you the long-let asking rent for the area by bedroom band, the Local Housing Allowance rate, and how prices and listing stock are moving, from your assistant.