Property investors today seem to face one of two choices: chase the higher returns of short-term holiday lets or opt for the steady income of buy-to-let property investments. Both paths offer distinct advantages for your portfolio, but which delivers better long-term value?
Social housing, in particular, is an attractive alternative to traditional investments, offering consistent yields with lower tenant turnover. While, short-term lets continue to promise impressive profits in popular locations despite needing more hands-on management.
Investing in Social Housing vs Short-Term Let Properties: At a Glance
| Factors to Consider | Short-Term Lets | Social Housing |
| Property Types | Flats, houses, holiday rentals | Council housing, housing associations, shared ownership, supported living |
| Typical Yield | Gross yield 7-15% (dependent on time of year and location) | Gross yield 8-9% |
| Demand | Seasonal and location-dependent is higher in tourist areas | High due to housing shortages and government support |
| Initial Cost | Higher costs in prime tourist areas or cities | Higher initial costs |
| Financing | Requires larger deposits and stricter mortgage criteria | Usually cash-only purchases |
| Management | Intensive management due to frequent tenant turnover and cleaning needs | Self-managed by the landlord or outsourced by housing associations |
| Tenant / Renter Turnover | High turnover due to short stays | Low, as tenants often stay long-term (5+ years) |
| Location Dependency | Highly dependent on proximity to tourist attractions or business hubs | Less location-sensitive as demand exists nationwide |
| Capital Appreciation | Potentially faster appreciation in high-demand areas | Gradual appreciation over time – long-term investment focus |
| Risk Level | Higher risk due to market fluctuations and seasonality | Low risk due to stable demand and long-term leases |
| Seasonality | Peak seasons drive income while off-seasons reduce it | Year-round demand for affordable housing |
| Target Tenants | Tourists, business travellers, holidaymakers | Low-income families, vulnerable individuals, the elderly, etc |
| Resale Market | Strong resale potential in high-demand areas | Broader market appeal |
| Maintenance Costs | Higher costs due to frequent cleaning and repairs between stays | Lower as the housing provider covers them |
| Tax Implications | Holiday let tax rules can be complex depending on location and regulations | Subject to various taxes (Stamp Duty, Capital Gains Tax, Income Tax) |
| Social Impact | Limited social impact as a primarily profit-focused investment | Contributes to solving housing shortages and supports vulnerable populations |
Short-Term and Holiday Lets
Short-term lets, or serviced accommodation, are properties rented out for short periods, typically from a few days to several weeks. These properties cater to tourists, business travellers, and those needing temporary accommodation. The UK short-term rental market has experienced significant growth, with platforms like Airbnb reporting over 200,000 listings across the country and average occupancy rates of 23.8%.
In cities like London, Manchester, and Edinburgh, short-term rental properties can generate 30% higher yields compared to traditional long-term rentals, though this varies significantly by location and season.
| Pros | Cons |
| Higher potential income – Can earn 30-50% more than traditional rentals in prime locations | Seasonal fluctuations – Income can vary dramatically between peak and off-peak seasons |
| Flexibility in personal use – Freedom to block out dates for your own holidays | More intensive management costs – Requires frequent cleaning, check-ins, and guest communication |
| Property appreciation in tourist areas – Popular destinations often see faster capital growth | Higher wear and tear – More frequent guest turnover leads to increased maintenance costs |
| Tax advantages – Ability to offset more expenses against rental income like council tax and utility bills | Regulatory uncertainty – FHL tax advantages abolished in 2025 and need planning permission if rented for longer than 90 days |
| Premium pricing during events – Charge significantly more during local festivals or conferences | Potentially longer void periods – Risk of unbooked days, especially in off-peak times |
Higher Potential Income
Short-term lets can generate premium nightly rates compared to long-term rentals. A property that might generate £1,000 monthly as a traditional rental could potentially earn £2,000-£4000 when let on a short-term basis during peak seasons. This increased income potential is the biggest attraction for many investors, particularly in tourist hotspots or cities with regular business travellers.
Flexibility in Personal Use
Unlike long-term rental agreements, property ownerscan block out dates for personal use. To qualify as a furnished holiday let (FHL) for tax purposes, your property must be available to let for at least 210 days a year and be let commercially to the public for at least 105 days in the year. This flexibility means you can enjoy your property during specific periods while still generating income when you’re not using it.
This isn’t normally something that is thought about in a property investment strategy, but for investors seeking a holiday home that pays for itself, this dual-purpose arrangement can be particularly attractive.
Adaptable Pricing Strategy
Short-term lets can have dynamic pricing based on demand. During peak tourist seasons, local events, or conferences, owners can increase their rates. This adaptability means savvy investors can maximise their monthly rental income and returns by charging premium rates when demand is high, potentially earning in a few peak weeks that might take months to accumulate with a traditional rental.
Social Housing
Social housing investments provide accommodation for tenants who receive housing benefits or are placed by local authorities. This sector addresses the critical shortage of affordable housing in the UK, with 1.2 million households currently on social housing waiting lists nationwide. These properties are typically leased to housing associations or councils on long-term agreements, often spanning 3-5 years.
The UK government has committed £2 billion to expand affordable housing options, creating a growing opportunity for private investors to enter this market through various schemes and partnerships.
| Pros | Cons |
| Consistent rental income – Housing benefit payments provide reliable monthly revenue | Less control over tenant selection and location – Social housing investments are often restricted to certain areas |
| Reduced void periods – High demand means properties rarely sit empty | Higher initial tax implications |
| Minimal tenant management – Housing associations often handle day-to-day tenant issues | Government policy is ever-changing – Landlords need to keep up to date with changes |
| Reduced wear and tear – Longer tenancies mean less frequent turnover and refurbishment | Changes in government funding that can affect income |
| Social impact investing – Contributing to solving housing shortages while earning returns | Stigmatisation of social housing – Affects the perceived value and desirability of the investment |
Guaranteed Rental Income
With long-term contracts typically backed by housing associations or local authorities, investors can enjoy virtually guaranteed rent payments. Unlike private rentals, where tenant financial difficulties can lead to missed payments, social housing provides consistent monthly income without the stress of chasing payments or dealing with arrears.
Minimal Management Requirements
Social housing investments are essentially hands-off once established as the housing association or local authority typically handles maintenance requests, inspections, and tenant issues. This arrangement drastically reduces the time commitment required from investors, making it ideal for those seeking passive income without the daily demands of property management.
High Occupancy Rates
With the current housing shortage, social housing properties have exceptionally high occupancy rates. The persistent gap between housing supply and demand means these properties rarely ever sit empty, eliminating the costly void periods that can impact returns on traditional buy-to-let investments. This consistent occupancy provides more reliable cash flow and improved long-term yield calculations.
Which is a better property investment: short-term rental lets or long-term lets like social housing?
Short-term lets undoubtedly have their appeal, and the potential for premium pricing during peak seasons and major events can boost your annual returns. For hands-on investors with properties in tourist hotspots, these higher yields are definitely more attractive.
But the reality is that those impressive returns come with considerable drawbacks. The management demands are relentless – constant communication with guests, coordinating cleaners, handling check-ins at all hours, and solving problems remotely. And that’s before considering the seasonal dips, when your property might sit empty for weeks, draining your profits.
This is precisely why more investors are turning to social housing: the consistency and reliability. No more worrying about seasonal fluctuations or scrambling to find guests during quiet periods. Instead, your property generates dependable income month after month with virtually no management headaches.
This predictability is invaluable for serious property investors looking to build wealth over time. Social housing lets you scale your portfolio without scaling your workload – each additional property adds steady income rather than multiplying your management burden. And with the current housing shortage showing no signs of easing, demand for these properties remains exceptionally strong, protecting your investment from market volatility.
Explore the UK Property Market with Yield Investing
Social housing offers what most property investors truly want: consistent income and long-term tenants without constant management headaches.
At Yield Investing, we’ve developed direct relationships with housing associations across the UK’s highest-demand areas. These partnerships give our clients access to properties with secure yields of 8-9% over extended periods.
We handle everything – from sourcing suitable properties to managing ongoing relationships with housing partners. You simply receive monthly income without the usual landlord stresses.
Ready to start investing in property or strengthen your portfolio? Contact our team today to discover how our social housing developments can deliver the reliable returns you deserve.
