The traditional buy-to-let model has become less profitable due to rising taxes, increased regulations, and stricter landlord restrictions. Meanwhile, Airbnb and short-term rentals provide higher yields, greater flexibility, and significant tax benefits for property investors in Cambridge.
This guide explains why landlords are moving away from long-term tenancies and switching to short-term rentals to maximize income and reduce risks.
1. Why Buy-to-Let Is Becoming Less Profitable
1.1 Increased Tax Burdens for Landlords
✔ Mortgage interest tax relief has been phased out, reducing buy-to-let profits.✔ Higher capital gains tax (CGT) and stricter rental income taxes make traditional letting less attractive.✔ Stamp Duty Surcharge (3%) applies to additional properties, increasing costs.
✔ Tip: Airbnb hosts can benefit from Furnished Holiday Let (FHL) tax advantages, making short-term rentals more tax-efficient.
1.2 Stricter Regulations & Tenant Protections
✔ Evictions are becoming harder, with extended notice periods and legal hurdles.✔ Rent caps and tenant rights reforms could further limit landlord control.✔ Energy efficiency (EPC) upgrades require costly property improvements.
✔ Tip: Short-term lets avoid tenant eviction issues, rent caps, and lease restrictions.
1.3 Rent Arrears & Tenant Risks
✔ Unpaid rent and problem tenants can result in months of financial loss.✔ Legal disputes & evictions take time and cost thousands.✔ Properties suffer long-term wear and tear from permanent tenants.
✔ Tip: Airbnb guests prepay their stay, reducing the risk of non-payment or property damage.
2. The Financial Benefits of Switching to Airbnb
2.1 Higher Rental Yields & Profitability
✔ Short-term rentals earn 50-100% more than long-term rentals.✔ Peak season pricing allows landlords to charge premium nightly rates.
Example: Buy-to-Let vs. Airbnb Earnings
Rental Type | Monthly Income |
Buy-to-Let (Long-Term Rental) | £1,500 |
Airbnb (Short-Term Rental: £150/night x 20 nights) | £3,000 |
✔ Tip: Even with occasional vacancies, Airbnb can double rental income compared to buy-to-let.
2.2 More Control Over Pricing & Availability
✔ Adjust pricing dynamically based on demand.✔ Block out dates for personal use whenever needed.✔ No long-term commitments to tenants, offering greater financial flexibility.
✔ Tip: Airbnb management services optimize pricing strategies to maximize occupancy and revenue.
2.3 Tax Advantages of Short-Term Rentals
✔ Furnished Holiday Let (FHL) status allows landlords to:
Claim mortgage interest tax relief (unavailable for buy-to-let).
Deduct capital allowances on furnishings & renovations.
Qualify for reduced capital gains tax when selling.
✔ Tip: Landlords with an Airbnb property pay less tax compared to buy-to-let investors.
3. Operational & Lifestyle Benefits of Airbnb
3.1 No Long-Term Tenant Risks or Evictions
✔ Airbnb guests prepay, eliminating rent arrears risks.✔ No need for complex eviction processes if guests cause issues.✔ Frequent cleaning & maintenance keeps the property in better condition.
✔ Tip: Short-term rental hosts avoid landlord-tenant disputes and maintain full control of their property.
3.2 Professional Cleaning & Maintenance Keep the Property in Better Condition
✔ Airbnb properties are professionally cleaned after every stay.✔ Regular maintenance prevents major repairs that long-term tenants might ignore.✔ Luxury furnishings & décor are preserved better, increasing property value.
✔ Tip: Short-term lets require higher standards, but they keep your property in better shape long-term.
3.3 Increased Flexibility for Landlords
✔ Block out personal stays whenever needed.✔ Easily switch between short-term and long-term lets based on market trends.✔ No lock-in contracts with long-term tenants.
✔ Tip: If regulations change, landlords can revert to long-term lets anytime.
4. The Challenges of Running an Airbnb & How to Overcome Them
4.1 Guest Turnover & Management Workload
✔ More frequent guest check-ins & communication.✔ Higher cleaning & maintenance expectations.
✔ Solution: Use a professional Airbnb management service to handle everything.
4.2 Seasonal Fluctuations & Vacancy Risks
✔ Low seasons (winter) may result in fewer bookings.
✔ Solution: Target corporate, NHS, and long-term relocation guests for year-round income.
4.3 Regulatory Uncertainty
✔ Short-term lets may face future regulations.
✔ Solution: Work with a property management company that ensures full compliance.
5. Why Cambridge Is Ideal for Airbnb Investments
5.1 High Year-Round Demand
✔ Cambridge University, tourism, NHS staff, and tech professionals ensure consistent Airbnb bookings.✔ Major events (graduations, conferences, business meetings) drive short-term rental demand.
5.2 Strong Short-Term Rental Yields
✔ City-centre properties earn up to £250 per night.✔ Serviced apartments for business travelers stay occupied year-round.
5.3 Corporate & Extended Stay Market
✔ Relocating professionals & academics prefer fully serviced apartments over hotels.✔ Long-stay discounts keep occupancy rates high.
✔ Tip: A mix of short-term and mid-term stays ensures year-round revenue stability.
6. How Cambridge Stays Helps Landlords Switch to Airbnb
✔ Full-service Airbnb management – No stress, just passive income.✔ Dynamic pricing strategies – Maximize profits with real-time rate adjustments.✔ Cleaning & maintenance coordination – Keep your property guest-ready at all times.✔ Direct booking website & corporate partnerships – Reduce reliance on Airbnb fees.
How a Cambridge Landlord Increased Profits by 70% After Switching from Buy-to-Let
Issue: A landlord earning £1,600/month on a long-term lease wanted higher returns.Solution: Switched to Airbnb with Cambridge Stays’ full management.Result: Increased monthly income to £3,500, with 85% occupancy year-round.
📈 Buy-to-let landlords in Cambridge are making the switch to Airbnb for higher returns, more flexibility, and better tax benefits.
💰 Short-term rentals offer:✅ Double the income potential✅ No tenant risks✅ Greater control over property use
📞 Thinking about switching from buy-to-let to Airbnb?🔹 Contact Cambridge Stays today for a free consultation!
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