Short-Term Lettings in Long Lease Flats
Property owners holding long-term residential leases frequently ask whether they can legally use their flats for short-term, “Airbnb” style holiday lettings or temporary guest accommodation. With the rise of the sharing economy, short-term letting has become an attractive way to generate additional income. However, many leaseholders mistakenly believe that owning a long lease—often spanning 99 to 999 years—gives them the absolute right to use the property as they see fit.
In reality, the legal landscape surrounding short-term lets in leasehold properties is highly restrictive. UK tribunals and courts have repeatedly ruled that short-term, transient lettings conflict with standard lease terms. While every dispute ultimately depends on the exact wording of the lease agreement, leaseholders face substantial legal risks if they open their doors to paying guests without analyzing their underlying contracts.
Key Legal Differences: License to Occupy vs. Residential Tenancy
To understand why short-term lets present such a legal challenge, it is necessary to examine how these arrangements are classified under UK property law. An Airbnb letting is generally not considered a residential tenancy. Instead, it is legally classified as a license to occupy. This represents a temporary hospitality or holiday arrangement rather than a formal landlord-tenant relationship.
The distinction rests on three fundamental pillars:
- Nature of Occupancy: In a traditional tenancy, the occupant receives “exclusive possession” of the property, establishing a legal interest in the land for a defined period. Conversely, short-term guests merely hold a temporary right to use the space for a holiday or business trip. They do not gain exclusive possession in the eyes of the law.
- Security of Tenure: Traditional tenants benefit from robust statutory protections and rights, such as those governing an Assured Shorthold Tenancy (AST). These laws grant tenants the right to remain in the property until specific legal procedures are followed to evict them. Short-term guests enjoy no security of tenure and must vacate immediately when their booking expires.
- Governing Rules: While standard rentals are heavily regulated by residential tenancy legislation—including the Housing Act 1988 and the Renters’ Rights Act 2025—short-term lets fall under hospitality, tourism, and local planning frameworks.
Traditional Landlord-Tenant Relationships vs. Short-Term Models
The traditional landlord-tenant model involves months or years of continuous occupancy. The relationship is governed by strict statutory rules defining rent increases, repair obligations, and deposit protection schemes. Management is predictable: the landlord collects monthly rent, addresses occasional maintenance issues, and conducts periodic, pre-scheduled inspections.
The short-term letting model operates more like a hotel. Guests stay for a few days or weeks, requiring intensive, hands-on operational management. This model demands constant day-to-day communication, complex check-in and check-out logistics, professional cleaning between stays, and laundry services. Because the turnover is high, the impact on the wider building and its infrastructure is significantly greater than that of a long-term tenant.
Common Covenants Violated by Short-Term Lettings
When a leaseholder operates a short-term letting business, they risk breaching several restrictive covenants embedded within their long lease. Freeholders and management companies are increasingly enforcing these clauses to maintain building security and protect other residents.
Private Residence or Dwelling Only
Most residential leases contain a covenant requiring the flat to be used strictly as a “private residence” or “private dwelling.” The Upper Tribunal established a major legal precedent on this issue in the landmark case of Nemcova v Fairfield Rents Ltd.
In this case, the court examined whether a leaseholder letting a flat out for short periods on Airbnb breached the “private residence” clause. The tribunal ruled that for a property to be used as a private residence, there must be a degree of permanence. Because weekend or holiday guests stay only transiently, they do not treat the flat as their home. Consequently, a succession of short-term paying guests fails to satisfy the covenant, making the practice a clear breach of lease terms.
Alienation and Subletting Restrictions
Leases almost universally contain alienation covenants that restrict a leaseholder’s right to underlet, part with possession, or share possession of the property. Many agreements strictly forbid underletting the whole or part of the flat, or require the freeholder’s prior written consent.
Because an Airbnb arrangement grants paying guests temporary possession of the entire property in exchange for money, it frequently triggers breaches of subletting prohibitions. Even if labeled a “licence,” courts look at the practical reality of the arrangement; granting total access to a property to a stranger for a fee often constitutes a breach of alienation clauses.
Nuisance, Safety, and Insurance
Beyond residence and subletting rules, short-term lets can violate standard clauses regarding nuisance and insurance. A high volume of transient guests moving luggage through communal hallways can cause disruption, noise, and wear and tear, violating covenants against causing a nuisance to neighbours. Furthermore, standard commercial building insurance policies for residential blocks often explicitly exclude short-term holiday letting. If a leaseholder’s activities invalidate the block insurance policy, the freeholder can take immediate legal action.
Conclusion and Recommendations
Operating short-term lets in long lease flats carries severe legal consequences. Freeholders can seek injunctions to stop the lettings, claim damages for breach of contract, or even initiate forfeiture proceedings to repossess the flat entirely.
The law on property lettings is complicated, and its application varies depending on the specific wording of your lease document. If you are a leaseholder considering short-term letting, or a management company dealing with unauthorized holiday lets in your block, we highly recommend seeking specialist legal advice as soon as you become aware of a potential problem.
Charrette Law
August 2026
