Serviced Accommodation vs Traditional Letting: Which Is Right for Your Property?
As a property owner in the UK, you may be weighing up whether to stick with a traditional letting model or explore the growing demand for serviced accommodation. Both routes have their benefits – but they serve very different needs, come with different responsibilities, and offer distinct earning potentials.
At Gough Groves, we help property owners make the most of their investments through flexible, high-yield short-term rental management. Here’s a clear comparison to help you decide if serviced accommodation is the right move for you.
What is Serviced Accommodation?
Serviced accommodation refers to fully furnished short-term rentals, often listed on platforms like Airbnb and Booking.com. They’re used by business travellers, contractors, families relocating, and tourists – typically for stays ranging from a few nights to several weeks or months.
As the owner, you can either manage bookings and guests yourself, or partner with a management company (like us) to handle everything on your behalf.
What is Traditional Letting?
Traditional letting usually involves renting your property to a tenant on a longer-term basis, typically through an Assured Shorthold Tenancy (AST). These agreements are often six or twelve months long and offer predictable monthly rental income – but come with legal responsibilities, eviction constraints, and limited flexibility.
Key Differences: Serviced Accommodation vs Traditional Letting
FeatureServiced AccommodationTraditional LettingIncome PotentialHigher (especially in high-demand areas)Fixed monthly rentOccupancy TypeShort-term guestsLong-term tenantsFlexibilityHigh – use property yourself or adjust pricing seasonallyLow – fixed contracts with notice periodsManagement NeedsHigher (cleaning, guest communication, pricing updates) unless outsourcedLower day-to-day involvementLegal ClassificationOften classed as a business; different tax treatmentResidential tenancy laws applyWear and TearManaged through regular cleaning and inspectionsCan be harder to monitor until tenancy endsVoid Period RiskMore dynamic, but fewer long voids if well-managedMore stable occupancy but risk of long vacancies between tenants
Income Potential: A Closer Look
Many landlords move into serviced accommodation to unlock greater income potential. A well-managed short-term rental can generate 1.5x to 3x the income of a traditional let – especially in areas with strong demand from business or leisure travellers.
For example, a three-bed house that rents for £800/month via a traditional AST might bring in £2,000–£3,000/month as serviced accommodation — even after management and cleaning fees.
Effort vs Reward
With greater returns come greater responsibilities. Serviced accommodation requires:
Professional cleaning between guests
24/7 guest communication
Dynamic pricing to maximise occupancy and revenue
Listing and reputation management
The good news? You don’t have to do it all yourself. At Gough Groves, we manage every aspect of your property so you can enjoy the income without the hassle.
Tax and Regulation Considerations
Serviced accommodation is often treated as a business rather than a rental, meaning:
You may be able to claim capital allowances
You aren’t affected by Section 24 mortgage relief restrictions (as long as the property qualifies as a Furnished Holiday Let)
You’ll need to understand local planning rules and potential Article 4 restrictions
We can help you navigate this – or connect you with accountants and planners who specialise in the short-let space.
Is It Right for You?
Serviced accommodation may suit you if:
Your property is in a location with strong visitor demand (e.g. city centre, near business hubs, or transport links)
You want higher returns and are happy to invest in quality furnishings and setup
You’re open to working with a management company or investing in tech and systems
Traditional letting may suit you if:
You prioritise stability over flexibility
You don’t want to deal with guests or regular changeovers
Your property is less suited to short stays (e.g. remote areas with limited demand)
Want to Explore the Serviced Accommodation Route?
At Gough Groves, we specialise in Airbnb and short-let management for landlords who want better returns with less effort. Whether you’re switching from an existing AST or starting fresh, we’ll guide you through every step from setup to guest check-in.
