Since 2023, serviced accommodation has exploded in popularity. Now in 2025, it will rank among the UK’s most profitable and fastest-growing property strategies.
What Is Serviced Accommodation in 2025?
Serviced accommodation involves renting fully furnished properties to guests for short stays, charging by the night or week, rather than the month. Unlike traditional term rental properties or HMOs, it functions more like hotel rooms, offering a ‘home from home environment’ with flexibility and convenience for travellers and contractors.
This model provides a fully equipped kitchen, furniture, and utilities, essentially a guest house experience without the staff, popular with tourists, contractors, and business travellers.
Who Stays in Serviced Accommodation?
Serviced accommodation appeals to a wide range of guests in 2025, making it a flexible and lucrative strategy for property investors:
- Tourists
Seeking comfort, privacy, and kitchen access during holidays
- Business travellers
Need short-term housing near city centres or event venues
- Contractors and tradespeople
Require multi-week stays close to job sites
- Relocators
Families or professionals in between moves who need a temporary home
- Event visitors
Attending conferences, concerts, or sporting events
Because it caters to so many demographics, serviced accommodation helps reduce void periods and increase revenue throughout the year.
Is Serviced Accommodation Legal in the UK?
Yes, serviced accommodation is legal in the UK
Local councils have introduced tighter regulations in recent years due to housing shortages and community pressure. Before starting, always:
- Check your local council’s website for short-let policies
- Confirm if you need planning permission or a material change of use
- Secure the right licence, such as a Short-Term Let Licence
- Use the right mortgage type and get lender consent if needed
- Comply with insurance and fire safety laws
Do You Need a Licence for Serviced Accommodation?
Licensing rules differ by local council. Many areas have new regulations to manage short-term rental properties due to housing shortages.
In London, you can only let a property for a maximum of 90 nights per year without special permission. Councils apply these rules to control housing supply.
Licences may include Short-Term Let Licences, selective licensing, or additional council permits. Always confirm requirements with your local authority to avoid penalties.
Do You Need Planning Permission for Serviced Accommodation?
In most cases, yes, you need to obtain planning. If you are renting out a regular home for short-term stays, you may need to reclassify it as a short-term rental. A standard home is classified as C3. You may need to switch it to a C1 category, which is typically used for hotels.
You may also need to apply for a material change of use. Some councils turn a blind eye, while others impose heavy fines. Don’t use a buy-to-let mortgage for SA without informing your lender. It’s a breach of terms.
Failure to obtain permission can result in enforcement action and substantial fines. Always tell your mortgage lender if you are using a buy-to-let mortgage. Not applying for planning permission can lead to fines and enforcement action.
Serviced accommodation may offer similar returns to hotels, but it also comes with legal obligations. And while it often provides more space compared to hotels, don’t assume that flexibility means fewer rules.
How Does Serviced Accommodation Work?
Guests book fully furnished serviced accommodation for short stays, paying nightly or weekly rates. You offer hotel-style amenities, including clean linens, high-speed Wi-Fi, utilities, and regular cleaning included in the rental price.
Where Can You List Serviced Accommodation Properties?
To attract bookings, your property needs visibility on trusted short-let platforms. The most effective channels include:
- Airbnb
Best for tourists and international guests
- Booking.com
Strong with business travellers and couples
- Expedia
Integrates with other travel products
- Your own website
For repeat direct bookings and increased profits
How to Set Up a Serviced Accommodation Business
Getting started in serviced accommodation involves several steps to ensure success and compliance.
Starting a serviced accommodation business in 2025 requires these essential steps:
- Look up popular places like tourist spots, business areas, and city centres. This will help you learn about local licensing and planning rules.
- Choose a compliant, well-located property. Confirm that the landlord and mortgage terms allow for short-term letting.
- Obtain all necessary licences and safety certificates, including Gas Safety, PAT Testing, Fire Risk Assessment, and Electrical Installation Condition Reports (EICR).
- Fully furnish the property with durable furniture, essential appliances, and fast Wi-Fi, creating a hotel-room experience.
- Implement property management software and reliable cleaning and maintenance teams for smooth operations.
- List your property on platforms like Airbnb and Booking.com, using high-quality photos and competitive pricing.
- Provide excellent guest communication and encourage positive reviews.
- Maintain accurate financial records, budget for ongoing costs, and consult a tax advisor for compliance purposes.
Serviced Accommodation Strategy Models
- Rent-to-serviced accommodation:
Leasing a property and subletting it as serviced accommodation offers low entry cost and risk.
- Whole let:
Best for groups, families and contractors
- Split the house into apartments
Maximises rental income by creating multiple units within one property.
Each model has its pros and cons, but all need clarity, licensing, and excellent guest management.
Why Investors Love Serviced Accommodation
Serviced accommodation delivers higher returns than standard buy-to-let properties and remains profitable even with occupancy rates as low as 20–30%. It suits contractors, tourists, and business travellers seeking flexible, hotel-style stays. This model allows investors to switch between short-term rentals and term rental properties, maximising income based on demand.
Example: A standard buy-to-let might earn you £400/month. The exact property, let at £100/night as serviced accommodation, only needs 7 nights to match that income.
What You Need to Set Up a Serviced Accommodation Business in 2025
Essentials You Must Have:
- PAT Testing
- Contents Insurance
- Serviced Accommodation Licence
- Planning Permission
- Fire Risk Assessment
- EICR (Electrical Installation Condition Report)
- Gas Certificate
- Public Liability Insurance
Always check with your local authority.
The Difference Between Serviced and Non-Serviced Accommodation
The key difference between serviced and non-serviced accommodation lies in the level of convenience and flexibility offered. Serviced accommodation includes all furniture and appliances, offers a fully equipped kitchen, and caters to short-term stays, much like a hotel. It typically consists of all utilities, Wi-Fi, and cleaning services, making it ideal for guests such as tourists, contractors, or business travellers.
In contrast, non-serviced accommodation is typically unfurnished, intended for long-term tenants, and does not include extras such as cleaning or utility bills. Tenants should manage these themselves, similar to how they would with a standard rental property.
Rent to Serviced Accommodation: Low-Cost Entry Point
Rent-to-serviced accommodation involves leasing a property from the landlord and then subletting it as serviced accommodation. It’s a low-risk way to start, considering there’s no need to buy the property.
Just ensure the landlord agrees and confirms that their mortgage and insurance permit it. You must still comply with all safety regulations.
Final Thoughts: Is Serviced Accommodation Worth It?
Absolutely, but only if done correctly. Many investors are earning £1,000–£5,000/month per unit. But make no mistake, serviced accommodation is not passive. You’ll need strong systems, reliable cleaners, and complete compliance.
Frequently Asked Questions
Q: How much can I earn from serviced accommodation in 2025?
A: Earnings can be very different. Many investors say they earn between £1,000 and £5,000 per unit each month. This depends on location, occupancy rates, and the property’s management.
Q: Can I manage serviced accommodation remotely?
A: Yes, you can manage properties from afar. You need good property management software and trustworthy local teams for cleaning and maintenance.
Q: What are the most significant risks in serviced accommodation?
A: Non-compliance with licensing, inconsistent bookings, and inconsistent cleaning services are top risks. Proper systems reduce these.
Serviced Accomodation Podcast
🎧 Want more insights on serviced accommodation? Tune into this episode of the Progressive Property Podcast.
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