Are you aware of the seismic shift in the UK’s rental market?
According to a report by HVS, there’s been an impressive 22% increase in the serviced accommodation sector in 2022.
It isn’t a fleeting trend; it’s a significant transformation here to stay.
As a landlord, this evolution could unlock new avenues for you.
So, let’s dive in and explore why serviced accommodation is revolutionising the future of renting in the UK.
Key Takeaways
- Serviced accommodation, blending the comfort of long-term rentals with hotel-like amenities, is revolutionising the UK rental market, offering landlords versatility, convenience, and higher rental income.
- Despite challenges such as higher operational costs and potential void periods, strategic planning and understanding of the market can help landlords tap into the lucrative potential of serviced accommodation.
The Rise of Serviced Accommodation in the UK
Serviced accommodation, a term buzzing around the UK property market, is a unique blend of long-term rental properties and hotels.
It offers the homely comfort of a rental property and the luxury and convenience of hotel-like amenities.
Here’s why this concept has been gaining traction:
1. Versatility
Serviced accommodations cater to a wide range of clientele.
- Tourists seeking a home-like environment during their travels
- Business travellers needing a comfortable space for extended stays
- Locals in need of short-term accommodation during a move or renovation
…all find serviced accommodation a perfect fit.
2. Convenience
Imagine staying in a place that offers the comfort of a home, but you don’t have to worry about…
- Cleaning
- Laundry
- Cooking
…if you don’t want to.
That’s the convenience serviced accommodation offers, making it a hit among tenants.
3. Profitability for Landlords
The rise of platforms like Airbnb has opened up new avenues for landlords. Traditional buy-to-let properties are being transformed into serviced accommodations, offering higher returns due to the premium for short-term stays and amenities.
For instance, consider a landlord in London who switched from a traditional rental setup to serviced accommodation. Previously, they were earning £1,500 per month from their two-bedroom flat.
After converting it into serviced accommodation, they started charging £100 per night. With an average occupancy rate of 75%, their monthly income shot up to over £2,000.
Landlords across the UK, in cities like Manchester, Birmingham, and Edinburgh, are reaping the benefits of this shift.
You might wonder, “What makes serviced accommodation a lucrative investment?” Let’s delve into that in the next section.
Why Is Serviced Accommodation a Lucrative Investment?
Investing in serviced accommodation in the UK presents a unique opportunity for landlords. Here’s why:
Higher Rental Income
Serviced accommodations offer many amenities, from cleaning services to fully equipped kitchens not typically found in traditional buy-to-let properties.
These added conveniences allow landlords to charge a premium, leading to a higher rental income.
Increased Profits During Peak Seasons
The short-term nature of serviced accommodations means landlords can adjust prices based on demand.
Landlords can increase prices during peak tourist seasons or local events, increasing profits.
However, it’s not all sunshine and roses. There are challenges to consider:
Higher Operational Costs
Running a serviced accommodation involves more operational costs than a traditional rental.
These can include:
- Cleaning
- Maintenance
- Management costs
However, these costs are often considered part of the business expenses and can be offset against the rental income for tax purposes.
Risk of Void Periods
Like any short-term rental, serviced accommodations can face void periods.
When?
During off-peak seasons.
However, strategic marketing and offering competitive prices during these periods can help maintain a steady income.
In essence, the future of renting in the UK is leaning towards serviced accommodation.
With careful planning and strategic decision-making, landlords can tap into the lucrative potential of this growing sector.
The key is to:
- Understand the market
- Keep abreast of the latest trends
- Adapt to the changing needs of tenants
Having explored the lucrative potential of serviced accommodation, let’s now focus on the hotspots in the UK where this trend is taking off.
Serviced Accommodation Hotspots in the UK
When it comes to serviced accommodation, location is key. And in the UK, some cities are simply a cut above the rest.
Take York, for example. This city is a history and culture treasure trove, attracting a steady stream of tourists yearly.
The demand for comfortable, short-term accommodation here is high, making it a prime spot for serviced accommodation.
Then there’s Chester. Its Roman walls, historic sites, and easy access to Wales make it a hit with tourists. The demand for serviced accommodation here is rising, making it another hotspot to consider.
Knowing the potential of serviced accommodation and where to invest is one thing. But how about finding and booking one for yourself?
Let’s explore that next, and see how Pluxa Property can assist you in this journey.
Navigate the Future of Renting with Pluxa Property
The rise of serviced accommodation in the UK is more than just a trend; it’s a significant shift in the property market here to stay.
As we’ve explored, this shift offers a wealth of opportunities for landlords and a new world of convenience for tenants.
Whether you’re…
- A landlord looking to tap into this lucrative market
- A tenant seeking the perfect serviced accommodation
…navigating this landscape can be complex.
But you don’t have to do it alone.
At Pluxa Property, we’re here to guide you every step of the way.
With our deep understanding of the UK property market and our commitment to personalised service, we can help you make the most of the opportunities that serviced accommodation offers.
So, why wait? Let’s embrace the future of renting together.
Contact us today.
FAQs
How can I find and book serviced accommodation in the UK?
Start by searching on online platforms like Airbnb. Filter the results based on your preferences and read the reviews. Reach out to the host to discuss your requirements for serviced accommodation.
Is it possible to negotiate the rental terms for serviced accommodation?
Yes, it’s possible. Communication is key in negotiation. Discuss your requirements with the host directly to reach a mutually beneficial agreement.
Peter Juhasz is the founder of Pluxa Property, the biggest property investment company in UK and Group CEO of AIP Capital Group and a property investment expert with over a decade of experience in the UK market.
He built a successful property company using innovative cashflow strategies like Serviced Accommodation and HMOs, scaling to 200 units in four years.
Peter leads a team specializing in property and business acquisitions across various sectors. A former co-host of “Cashflow With Property,” he shares his expertise in real estate investing and business scaling.
He is committed to continuous learning and helping SME owners and investors maximize their returns, driven by his passion for empowering others to achieve their financial goals.
To learn how Pluxa Property can help you in UK property investment, contact our experts.
