Why We Do Not Touch Serviced Accommodation

September 30, 2025

The Sudden Craze for Serviced Accommodation

The property world has trends that come and go but one of the fastest to rise and now faltering is serviced accommodation. Almost overnight the market was flooded with people promising easy profits from turning ordinary apartments into lucrative short term lets. The situation worsened when the rent to serviced accommodation craze began where people with little property knowledge took on leases and attempted to sublet them at inflated nightly rates. These trends were fuelled by get rich quick type property sourcers who would do a quick search on Rightmove for any flat or house in a busy town and assume tourists or contractors would be lining up to book them. Reality has proven very different.

Why Businesses Still Prefer Hotels

Demand for serviced accommodation is limited for two major reasons. The first is inconsistency. Hotels offer stability and predictability. Businesses booking accommodation for staff know that with hotels there is no scrambling for parking spaces, no chasing a Wi-Fi password, no worrying about whether the kitchen utensils are clean, and no hassle if something goes wrong. Serviced accommodation struggles to match this level of consistency which is why many businesses continue to place their staff in hotels rather than risk a poor experience in a makeshift setup.

Increasing Pressure from Councils and Rising Costs

The second major challenge is regulatory and financial pressure. Councils across the UK are cracking down on AirBnB style properties and imposing tighter rules on serviced accommodation. On top of that the overheads are relentless. Management costs, cleaning fees, maintenance bills and frequent repairs all eat into margins. Unlike more stable rental models serviced accommodation requires constant attention to maintain standards and keep guests satisfied. What looks attractive on paper quickly becomes unsustainable in practice.

Dependence on Tourism and Short Term Projects

Unlike HMO properties serviced accommodation is heavily dependent on tourism and on occasional large scale projects where builders or contractors need housing for a short period. This makes it vulnerable to seasonal fluctuations and unpredictable demand. HMO tenants by contrast typically stay for six months or longer providing reliable income and long term occupancy. This difference makes HMO properties far more stable and suitable for building a secure portfolio.

The Challenge of Pricing and Profitability

Another overlooked problem is pricing. Room rates or nightly rates vary dramatically and are influenced not only by demand but by the constant costs of cleaning and repairs. These fluctuations make it incredibly difficult to scale an efficient or profitable portfolio. Investors often underestimate how fragile these margins are and how quickly profitability can disappear.

Our Position and Proven Alternative

For over 23 years we have specialised in HMO property development and management. We do not touch serviced accommodation because it lacks the consistency, stability and profitability required for long term success. Instead we continue to focus on HMOs where tenants commit to six months or more, where cashflow is reliable, and where sustainable growth is achievable.

If you are looking for a fully managed, high cashflow HMO investment that benefits from our decades of experience visit www.footforwardproperties.co.uk/hmo-for-sale.