The choice between an Assured Shorthold Tenancy vs Short-Term Lets is one of the most consequential decisions a landlord or investor will make in 2025. Each route offers different revenue profiles, management demands and regulatory obligations. This guide compares the two models across yields, tenant risk, regulatory compliance and operational cost so you can choose the strategy that suits your capital, time and risk appetite. From rent durability to planning and licensing, this article covers what matters when evaluating Assured Shorthold Tenancy vs Short-Term Lets.

What each model actually is

An Assured Shorthold Tenancy (AST) is the standard private tenancy in England and Wales. ASTs frequently begin with a fixed term, commonly six or 12 months, then either roll on or renew. ASTs are designed for longer stays and are regulated under established landlord and tenant law.

Short-term lets are typically nightly or weekly lets marketed through platforms or serviced accommodation operators. Short-term lets can deliver substantially higher monthly revenue where demand and occupancy are strong, but they also attract additional management, marketing and compliance obligations. Planning rules and local licensing are increasingly relevant to short-term lets in many local authorities.

Financial comparison: yields, revenue and costs

When comparing Assured Shorthold Tenancy vs Short-Term Lets, investors should model net revenue, not headline figures. ASTs generally produce a steady monthly income and lower void risk. Office for National Statistics data confirms private rents remain elevated year on year, supporting predictable cashflow for AST portfolios. See ONS private rent data: ONS.

Short-term lets can deliver higher gross monthly revenue in the right locations. Rightmove’s market reporting and rental trend tracking show advertised rents outside London reached record levels in recent quarters, but short-term let revenue remains location sensitive and more variable. Use conservative occupancy assumptions when modelling short-term lets to avoid overstating returns. See Rightmove rental trends: Rightmove.

Zoopla’s rental market analysis provides useful regional context when setting realistic rental and occupancy inputs. See Zoopla market insights: Zoopla.

Regulation and planning: what has changed recently

Regulation is a critical differentiator in the Assured Shorthold Tenancy vs Short-Term Lets decision. Government guidance on tenancy types and local planning rules means short-term lets may be subject to planning control or licensing depending on the number of nights and local policy. Check local authority guidance before committing to short-term lets. GOV.UK summarises tenancy types and where planning considerations may apply: GOV.UK — tenancy types.

AST landlords must comply with gas and electrical safety checks, deposit protection and prescribed information at tenancy start. Recent landlord reforms have raised compliance expectations and increased enforcement powers for local authorities. These changes increase the cost base for AST landlords as well as short-term let operators, so include likely compliance upgrades when underwriting.

Management and operational requirements

Operational demands differ sharply between the two models. ASTs are operationally simpler: longer tenancies, fewer turnovers and reduced day-to-day housekeeping. That translates to lower management fees and less operational complexity for buy-to-let landlords using letting agents.

Short-term lets require professional cleaning, rapid guest communications, dynamic pricing and ongoing marketing. Many landlords outsource to specialist serviced accommodation managers; this reduces workload but cuts into net returns. Evaluate management fees carefully when comparing Assured Shorthold Tenancy vs Short-Term Lets.

Tenant risk and reputational considerations

Tenant risk varies by market. AST tenants typically provide longer leases, which reduces void risk and the administrative burden of frequent checks. However, recent reforms affecting eviction processes mean that problem tenants can be harder to remove quickly, increasing exposure for landlords. Consider enhanced referencing, deposit protection and specialist landlord insurance to mitigate this risk.

Short-term lets carry different risks: guest damage, neighbourhood complaints and platform reputation management. Local crackdowns occur where councils deem short-term lets harmful to housing supply or local amenity. Always verify local planning and licensing rules before proceeding.

When Assured Shorthold Tenancy vs Short-Term Lets is the right choice

Choose AST where:

  • You want stable, predictable cashflow and lower management intensity.
  • The property sits in a residential area with strong long-term tenant demand.
  • You prefer lower operational risk and lower turnover.

Choose short-term lets where:

  • The property is in a high-visitor or business travel location with proven occupancy.
  • You can either manage the operational workload or afford professional management.
  • Local planning and licensing allow short-term letting without prohibitive cost.

When weighing Assured Shorthold Tenancy vs Short-Term Lets, run both underwriting scenarios with conservative assumptions for voids, occupancy and compliance costs. Use local rental data from Rightmove and Zoopla to set realistic rental and occupancy inputs. See Rightmove: Rightmove rental trends and Zoopla: Zoopla market insights.

Practical checklist for underwriting and compliance

  1. Model net yield under conservative assumptions for occupancy and voids.
  2. Confirm local planning policy and registration requirements for short-term lets. See GOV.UK for tenancy guidance: GOV.UK — tenancy types.
  3. Itemise operational costs: management, cleaning, insurance, licensing.
  4. Include any likely compliance upgrades for ASTs such as electrical and gas safety certificates.
  5. Stress test cashflow at higher interest rates and during extended void periods.

Conclusion

Deciding between Assured Shorthold Tenancy vs Short-Term Lets comes down to a clear assessment of revenue certainty, management appetite and regulatory risk. ASTs are typically the lower-risk route with a reliable monthly income. Short-term lets can generate higher revenue in the right locations but require professional management and careful attention to planning and licensing. Use conservative underwriting and check local council rules before committing to a short-term let strategy. For a tailored feasibility assessment and precise cashflow modelling for either route, contact TK Property Group.