Leasehold Advice
Subletting and Short-Term Lets: What Your Lease Allows
In lease terms, long subletting and short-term lets are very different things, even when people use the word interchangeably. This guide explains what each looks like in practice, what the lease usually allows, and how any of it shows up on a future sale.
At a Glance
In lease terms, long subletting and short-term lets are very different things, even when people use the word interchangeably. Long subletting (a normal tenancy to a single household, who lives in the flat as their home) is usually allowed, often with the freeholder's consent. Short-term letting (a string of guests staying for nights or weekends at a time on Airbnb or Booking.com) is almost always a breach of the lease, even where the alienation clause looks permissive, because the user clause requires the flat to be used as a private residence only. The two get talked about together but they are legally very different.
Most leaseholders considering letting their flat are thinking about the long-let route: a tenancy of the whole flat to someone who will live in it. That is the route the lease and the wider tenancy framework is set up for. The short-let market is a smaller, more rule-bound corner with planning law, lease covenants, lender conditions, insurance and council rules all sitting on top of each other, and most flats are not legally able to do it whatever the headline rental yield looks like.
This guide sets out what your lease typically allows and prohibits, the rules that wrap around any letting, what happens if you get it wrong, and how any of this affects a future sale. It applies to leasehold flats in England and Wales.
The Two Things People Mean by “Subletting”
The word subletting covers two very different things in everyday speech, and the lease treats them differently. Sorting them apart is the first step in working out what is and is not permitted.
Long subletting: a tenancy to a household
The classic version. The leaseholder lets the whole flat to one household on a tenancy, and the tenant lives in the flat as their home. Since 1 May 2026 these are periodic assured tenancies under the Renters' Rights Act 2025; the old fixed-term ASTs of six or twelve months no longer exist. The tenant can leave with two months' notice at any time; the leaseholder-landlord can only end the tenancy on a Section 8 ground. The leaseholder is the immediate landlord; the freeholder remains in the background. Most flat leases were drafted with the long-let arrangement in mind, and most allow it, often with the freeholder's consent and a modest administrative fee.
Short-term letting: a series of guests on a booking platform
The Airbnb or Booking.com version. The flat is offered for stays of a few nights or weeks at a time, to a continuous string of different people, each using the flat as temporary accommodation rather than a home. The leaseholder is functioning more like a small hotel operator than a residential landlord. Most flat leases were not drafted with this in mind, and the user covenant typically requires the flat to be used as a private residence only, which short-letting breaches even when the lease is silent on subletting itself.
Letting part of the flat: lodgers and the grey zone
The third category is taking in a lodger who shares part of the flat with the leaseholder. A genuine lodger is a licensee, not a tenant: the leaseholder keeps possession and simply shares occupation, so most alienation clauses (which restrict assigning, subletting and parting with possession) do not directly catch this arrangement. The user covenant can still bite if the flat starts to look like several separate occupations rather than a single private residence, and some leases include a specific clause restricting sharing occupation. In practice freeholders rarely object to a single lodger sharing the flat with a resident leaseholder; problems start where the lodger arrangement becomes more like running rooms as separate lettings.
What the Lease Usually Says
Two clauses in the lease do most of the work. Both need reading together.
The user clause
The user clause sets out what the flat can be used for. The standard wording is some version of “as a private residence only” or “as a single private dwelling-house”. This is the clause that catches short-term lets. The Upper Tribunal confirmed in Nemcova v Fairfield Rents Ltd (2016) that a series of short stays does not amount to use as a private residence, because the flat is no longer being used as anyone's home. The decision has been followed in later cases and is the standard authority cited by freeholders.
The alienation clause
The alienation clause sets out what the leaseholder can do with the lease itself: assign it, sublet it, charge it, or part with possession. Typical wording allows subletting the whole flat (often with the freeholder's prior written consent) and prohibits subletting part. Some leases require the subtenancy to be on certain terms (for example “not less than six months” or “to a single household”), which itself rules out short-let use. Many older leases also refer to “assured shorthold tenancies”, a form of tenancy that no longer exists after 1 May 2026 under the Renters' Rights Act 2025; the practical reading of those clauses is that they still bite on the intent (no short lets) even though the AST mechanism they assumed has gone.
Reading them together
The alienation clause might say subletting is permitted with consent. The user clause might still prevent the kind of subletting being contemplated. A short-term let can fall foul of the user clause even where the alienation clause is silent or permissive. The combination matters, not either clause in isolation.
Older leases and modern conditions
Leases written before short-letting platforms existed do not usually mention Airbnb by name, but the standard private-residence wording covers the situation by implication. Newer leases on developments built in the last decade are often more explicit, with express prohibitions on short-letting and sometimes a definition that catches lets of less than three or six months.
Long Subletting: Tenancies
Most leaseholders thinking about letting their flat are thinking about a long sublet to a single household. This is the route most leases were designed for, and the framework around it is well established.
Getting the freeholder's consent
If the lease requires consent, the leaseholder writes to the freeholder or managing agent before granting the tenancy. The administrative fee is typically £50 to £200, and the freeholder may ask to see the proposed tenancy agreement and the tenant's references. If the lease says consent will not be unreasonably withheld, section 19(1) of the Landlord and Tenant Act 1927 requires the freeholder to give a decision within a reasonable time and to set out the reasons for any refusal. Refusal is rare for a credible tenant on a standard tenancy. Some leases require the new tenant to sign a deed of covenant agreeing to comply with the lease covenants.
The tenancy itself
Since 1 May 2026 the Renters' Rights Act 2025 has replaced the assured shorthold tenancy regime with a periodic assured tenancy. All existing assured shortholds converted automatically. There is no fixed term, the tenant can give two months' notice at any point, and Section 21 no-fault evictions have ended. To recover possession the leaseholder-landlord needs a Section 8 ground (rent arrears, the landlord's own sale, redevelopment, anti-social behaviour and other listed grounds), with mandatory or discretionary thresholds depending on the ground.
The compliance load
Letting a flat brings a long list of legal obligations on the leaseholder-landlord, separate from anything in the lease. These include protecting the tenant's deposit in a government-approved scheme within 30 days, providing a valid Energy Performance Certificate, a current gas safety certificate (every 12 months) and an electrical installation condition report (every 5 years), and giving the tenant the relevant prescribed information (the How to Rent guide in England; in Wales, the landlord must also be registered with Rent Smart Wales). In England, the landlord must also carry out right-to-rent checks on the tenant's immigration status; Wales does not have an equivalent requirement. None of this is optional, and getting any of it wrong can prevent later recovery of possession.
The 12-month sale lock-in
One Renters' Rights Act 2025 change matters particularly for sellers: ground 1A (recovery to sell) and ground 1 (recovery for the landlord's own occupation) cannot be used in the first 12 months of the tenancy. After that window, the landlord serves a Section 8 notice with a four-month notice period before applying to court. The realistic worst case for getting a sitting tenant out on the new regime, starting from the date the tenancy began, is around 16 months. A leaseholder planning to sell within a year should not let the flat on a new tenancy first expecting to recover vacant possession quickly; that route has effectively closed.
Pros and cons of long subletting
The pros are well known: rental income, a sitting cover for the mortgage and service charge, and the option to come back to the flat later. The cons are equally real: the compliance load is heavier than it used to be, the Renters' Rights Act 2025 has made recovering possession slower and more procedural, building insurance and mortgage conditions need attention, and any future sale to an owner-occupier buyer needs the flat empty on completion. Long subletting is workable but it is no longer the low-touch arrangement it was a few years ago.
Short-Term Lets and the Legal Position
The short-let market exists, and a number of leaseholders run flats on Airbnb without ever facing enforcement. The legal position is much narrower than the practice suggests, and a leaseholder going down this route is usually relying on the freeholder not noticing rather than on the lease actually permitting it.
The lease point: Nemcova v Fairfield Rents
The leading case is Nemcova v Fairfield Rents Ltd, decided by the Upper Tribunal (Lands Chamber) in 2016. The leaseholder had let her flat through Airbnb for a series of short stays. The freeholder argued that this breached the user covenant requiring the flat to be used as a private residence only. The tribunal agreed: a series of guests using the flat as temporary accommodation is not use of the flat as anyone's private residence, even if the leaseholder also lived there between bookings. The case has been followed and is the standard authority. Almost every modern flat lease contains a user covenant that bites the same way.
The planning point: the London 90-night rule
Section 44 of the Deregulation Act 2015 allows residential properties in Greater London to be used as “temporary sleeping accommodation” for up to 90 nights per calendar year without that counting as a material change of use for planning purposes. Beyond 90 nights, planning permission is required, and is almost never granted for an individual flat. Airbnb enforces the 90-night cap on London listings automatically. The cap is property-based, not host-based, so multiple hosts in the same flat share the same 90-night allowance.
The 90-night rule is sometimes mistaken for a permission to short-let. It is not. It is a planning cap that says short-letting in London becomes a planning breach above 90 nights; it has no effect on lease covenants. A flat that breaches the user clause at night one still breaches it at night ten.
Article 4 directions: councils tightening the rules further
A growing number of London boroughs have made Article 4 directions that remove permitted development rights for short-letting in defined areas. Inside an Article 4 area, planning permission is needed from the first night of short-letting. Local rules in other parts of England and Wales vary widely; a leaseholder thinking about short-letting needs to check the position with the local planning authority before going further.
The wider rule changes coming
The government has announced a future short-term let registration scheme for England, and Wales has already brought one in. Once operational, hosts will need to register the property before letting it out. The scheme is not yet in force in England and the timetable has slipped more than once. It does not affect the lease position, only the additional layer of regulation around the practice.
Council, Tax and Insurance Knock-Ons
Beyond the lease itself, a string of other rules sit around any letting arrangement. None of them is the headline issue, but any one of them can cause real problems if ignored.
Building insurance
The block's building insurance, paid through the service charge, covers the structure. It typically assumes residential use. Short-letting can void cover or trigger a higher premium for the building, which the freeholder is entitled to recover. The leaseholder's own contents insurance is also affected: most standard contents policies exclude short-term let use. A specialist short-let insurer is needed if the activity is to be covered at all.
Mortgage conditions
A standard residential mortgage almost always prohibits letting without lender consent. A buy-to-let mortgage is required for normal long subletting and usually does not permit short-term lets either; some specialist short-let mortgages exist. Letting a flat under a residential mortgage without consent is a breach of the mortgage conditions, and the lender can call in the loan. It is rare but legally available.
Council tax versus business rates
A residential flat is on council tax. If the flat is available for short-term let for 140 nights or more per year in England and actually let for 70 nights or more, it can be reclassified as a self-catering holiday let and moved onto business rates. Small business rate relief may then apply. Wales has a substantially higher threshold: a property must be available for 252 nights and actually let for 182 nights before it qualifies. The reclassification is administered by the Valuation Office Agency in England and the Valuation Office in Wales, and can be backdated.
Houses in Multiple Occupation
A flat let to three or more unrelated people forming more than one household, sharing facilities, can be a House in Multiple Occupation. Some HMOs need a licence from the council. For a normal one-household tenancy this rarely arises, but a flat let room-by-room to different occupants probably is an HMO and probably needs a licence.
If You Breach the Lease
Freeholders do enforce subletting and short-let covenants, and the law gives them a range of remedies. The risks are not theoretical, but the worst-case outcome (losing the flat through forfeiture) is rare in practice.
The usual sequence
The typical pattern is a warning letter from the managing agent, followed by a more formal letter from the freeholder's solicitor, followed (if the breach continues) by an application to court for an injunction to stop the activity, with the freeholder's legal costs added on under the lease. Most cases settle at the injunction stage with the leaseholder agreeing to stop and paying the costs.
Forfeiture and the Section 146 notice
Forfeiture means ending the lease and recovering the flat. It is the freeholder's nuclear option. Before any court action for forfeiture, the freeholder must serve a notice under section 146 of the Law of Property Act 1925, identifying the breach, requiring it to be remedied within a reasonable period if it is capable of remedy, and requiring compensation. Courts almost always grant the leaseholder “relief from forfeiture” if the breach is stopped and the costs are paid, so an outright loss of the flat is rare. The costs of the process, though, can run to several thousand pounds, all recoverable from the leaseholder under the lease.
Damages and lost ground rent
A freeholder can also claim damages for the breach, particularly if the building insurance premium has risen because of the activity, or if the freeholder has had to deal with complaints from other residents about noise, security or wear and tear in the common parts. These claims are not the main remedy but they add to the cost of getting it wrong.
The practical risk profile
The likelihood of enforcement depends on the freeholder, the building and the neighbours. In a small block of mixed long-term residents, complaints get back to the freeholder quickly and enforcement is more likely. In a large institutional development, the freeholder may have a dedicated team that monitors listings on the platforms. A leaseholder considering short-letting in breach of the lease should at least be clear-eyed about the size of the risk before starting.
How Subletting Affects a Sale
Subletting comes up at two points in a sale. First, as a disclosure about what has happened in the past. Second, as a question about what is happening now.
Disclosures on the past
The seller's property information forms (the TA6 for general property information and the TA7 for leasehold-specific matters) ask about any tenancies and any consents given by the freeholder. A buyer's solicitor will follow up with enquiries about dates, the form of tenancy, deposit protection, gas safety, EPC, and freeholder consent. A long sublet that was done properly causes no problem: the answers are clean and the paperwork exists. A short-let history that was technically a breach is harder. It does not necessarily kill a sale, but it is a disclosure that has to be made, and a careful buyer's solicitor will want comfort that the freeholder is not about to start enforcement action.
Selling vacant or with a tenant in place
If the flat is currently tenanted, the seller has a choice between selling vacant and selling tenanted. Selling vacant means serving notice in good time and managing the gap between the tenant leaving and completion (which the Renters' Rights Act 2025 has made slower). Selling tenanted means selling to a buy-to-let buyer, with the tenancy paperwork and the rent roll forming part of the conveyancing pack. Tenanted sales typically achieve a price a few percent below vacant possession, because the buyer pool is narrower and the buyer's lender will value the flat on an investment basis.
Freeholder fees on a sale
Whether the flat has been let or not, the sale itself will trigger freeholder fees: a leasehold management pack (often £200 to £500), a notice of assignment fee, sometimes a notice of charge fee, and any deed of covenant the lease requires. These are normal sale costs, but a flat that has been let recently sometimes carries extra fees for additional consent checks or for catching up on consents not previously requested.
Cash-buyer sales and tenanted flats
Where a flat is tenanted and the seller wants a clean sale without serving notice, a cash buyer purchasing the flat with the tenant in situ can be quicker and more certain than going through the open market. The price reflects the tenant in place and is below vacant possession, but the sale completes without a vacant-possession deadline. For sellers caught between a sitting tenant and a closing window (a probate, a move abroad, a chain), this is a working option.
Relevant Legislation
Subletting and short-letting sit at the intersection of lease law, landlord and tenant law, planning law and tax law. The main statutes are:
The Landlord and Tenant Act 1927, section 19(1) applies where a lease says that consent for subletting will not be unreasonably withheld. It requires the freeholder to give a decision in a reasonable time and to give reasons for any refusal. It does not create a right to sublet where the lease prohibits it absolutely.
The Law of Property Act 1925, section 146 requires the freeholder to serve a formal notice before starting forfeiture proceedings for a breach of covenant, identifying the breach, requiring it to be remedied if remediable, and requiring compensation. It is the procedural gate to any forfeiture claim.
The Deregulation Act 2015, section 44 introduced the 90-night rule for short-letting of residential property in Greater London. Up to 90 nights of temporary sleeping accommodation per calendar year is not a material change of use for planning purposes; beyond that, planning permission is required.
The Housing Act 1988 (as amended) sets out the assured tenancy regime that applies to most lettings of flats. The Renters' Rights Act 2025 amended it heavily, replacing assured shorthold tenancies with periodic assured tenancies from 1 May 2026 and abolishing Section 21 no-fault evictions.
The Town and Country Planning (General Permitted Development) Order 2015, together with local Article 4 directions, governs whether planning permission is needed for change of use to short-letting in any given area outside the Deregulation Act framework.
Future legislation: the government has announced a short-term let registration scheme for England. The scheme is not yet in force in England and the timetable has slipped repeatedly. Wales introduced its own registration framework first.
Further Reading
Two related guides sit alongside this one: how to read your lease to find the relevant clauses, and what a no-subletting clause means when you come to sell.
Frequently Asked Questions
It depends on what your lease says. Most modern leases allow subletting the whole flat to a single household on a normal tenancy, sometimes with the freeholder's consent and sometimes without. Almost all leases prohibit subletting part of the flat (taking in lodgers in a separate-letting sense), and almost all leases prohibit short-term lets like Airbnb. The starting point is always the alienation clause and the user clause in your lease, read together.
Subletting in a lease context means granting someone the right to occupy the flat under a tenancy, with the tenant living there as their home. Since the Renters' Rights Act 2025, these are open-ended periodic assured tenancies rather than the old six- or twelve-month ASTs. A short-term let means renting the flat out for nights or weeks at a time to a series of different occupants who use it as temporary accommodation (Airbnb, Booking.com, corporate stays). The legal status of the two is very different. Long subletting is usually permitted under a lease, often with consent. Short-term letting is almost always a breach of the user clause, even when the alienation clause looks permissive.
Read the alienation clause in your lease. Some leases allow subletting of the whole flat without consent. Many require consent in writing, usually with a small administrative fee for the freeholder or managing agent and sometimes a deed of covenant from the tenant. If consent is required, the freeholder cannot withhold it unreasonably (section 19(1) of the Landlord and Tenant Act 1927 applies where the lease says consent will not be unreasonably withheld). The tenancy itself does not need to be registered at the Land Registry unless it is for more than seven years.
In most cases no, even if the lease seems silent on it. The Upper Tribunal confirmed in Nemcova v Fairfield Rents Ltd (2016) that letting a flat out on a series of short stays breaches a covenant to use the flat as a private residence only, because the property is no longer being used as anyone's home. Most leases of flats contain a user covenant of that kind. Separately, if the flat is in Greater London, the Deregulation Act 2015 limits short lets to 90 nights per calendar year without planning permission. Some local councils have Article 4 directions that tighten this further. A flat owner thinking about short-letting should check the lease, the local council's rules, the building insurance, and any mortgage conditions before listing.
Under section 44 of the Deregulation Act 2015, a residential property in Greater London can be used as temporary sleeping accommodation for up to 90 nights per calendar year without it counting as a material change of use for planning purposes. Beyond 90 nights, planning permission is required, which is almost never granted for an individual flat. Airbnb itself enforces the 90-night cap on London listings automatically. The rule applies to the property, not to the host, so multiple hosts in the same flat share the same 90-night allowance. The cap does not override the lease: a lease covenant against short lets still bites at night one, not at night 91.
The freeholder's main remedies are an injunction to stop the breach and a claim for damages. In serious or repeated cases the freeholder can start forfeiture proceedings, which means trying to bring the lease to an end and take back the flat. Before any court action for forfeiture, the freeholder must serve a Section 146 notice under the Law of Property Act 1925, setting out the breach and giving a reasonable period to put it right. In practice, the court will usually grant relief from forfeiture if the leaseholder stops the breach and pays the freeholder's costs, so the lease is rarely actually forfeit. The risk is real but it is rarely the first step: most freeholders start with a warning letter and an injunction.
Yes, but indirectly. The Act reshapes the tenancy a leaseholder grants to their tenant. From 1 May 2026 all new and existing assured shorthold tenancies became periodic assured tenancies; Section 21 no-fault evictions ended; rent increases are restricted to once per year by formal notice; and tenants gained stronger rights around pets, conditions and discrimination. None of this changes whether the lease allows subletting, but it does change what the leaseholder is signing up to once a tenant is in place. The decision to let, and the type of tenancy granted, now has more long-term consequences for the leaseholder than before.
Long subletting that has been done by the book (lease allows it, consent obtained if needed, tenancy properly documented) usually causes no real difficulty on a sale. The buyer's solicitor will ask about it, but consents and tenancy paperwork will satisfy them. Problems show up where the lease has been breached: short lets without consent, subletting where the lease did not allow it, or no freeholder consent where consent was required. Those become disclosures the seller needs to make, and they can affect what a buyer or their lender will accept. A tenant in occupation on completion is a separate issue: most owner-occupier buyers want vacant possession, and a buy-to-let buyer will want a clean assured tenancy with full paperwork.
Yes, but the buyer market is different. An owner-occupier buyer wants the flat empty on completion, which means serving notice on the tenant in good time and managing the gap between the tenant leaving and completion. A buy-to-let investor will buy the flat with the tenant in situ, paying a price that reflects the rental income; the tenancy paperwork (the assured tenancy, deposit protection, gas safety, EPC, electrical safety) becomes part of the conveyancing pack. Selling tenanted typically prices below vacant possession by a few percent because the buyer pool is narrower. The Renters' Rights Act 2025 changes have made serving notice on a sitting tenant slower and more cumbersome, which has pushed more sellers towards selling with a tenant in place.
Read the lease end to end, focusing on the user clause and the alienation clause. Check whether the building insurance covers short-term lets (most domestic policies do not). Check the mortgage conditions: a standard residential mortgage almost always prohibits short letting and may require consent for any letting at all. Check the local council's planning rules and any Article 4 direction. Confirm whether the property would attract business rates or council tax. If the lease prohibits short lets, the legally honest answer is not to do it. Some leaseholders take the calculated risk anyway; they should at least understand the size of the risk before they start.