The benefits of offering both short lets and licence to occupy
There has long been an understanding that short-term lets are the best way to maximise the income potential of a property. This remains true when high occupancy levels are achieved. However, as with many things, developing a more diverse model for your property — and introducing longer stays — can also bring significant benefits for owners.
By attracting not only leisure guests but also longer business stays during off-peak periods, you can achieve a more balanced approach. This is where a licence to occupy comes in. It provides owners with the flexibility to accommodate both short and longer stays, while still operating under the same property use terms. Crucially, it also ensures that the owner and letting agent retain a strong level of control.
We’ve explained how a licence to occupy works, the advantages of combining it with the short-term let model, and some key considerations to keep in mind.
What is a Licence to Occupy?
A licence to occupy is a legal agreement that allows someone to stay in a holiday home for an agreed period of time, without creating a tenancy. The guest can use the property and its contents, but does not gain tenancy rights or exclusive possession.
How does it work?
It is a contract that sets out how the property may be used. It specifies the services provided as part of the agreement, which should ideally include regular changeovers and linen provision, preferably at least every two weeks. The contract makes clear that it is not a tenancy, but serviced accommodation with bills included in the rental value.
Crucially, a licence to occupy avoids granting the guest tenancy rights under the Housing Act.
What are the benefits to property owners?
Offering a licence to occupy can increase both income and occupancy potential. By providing greater flexibility in the length of stays, property owners can accommodate both short-term and longer-term guests without losing control of their property. Additionally, the agreement sets out clear terms regarding bills, cleaning, and the use of the property, providing clarity and protection for the owner.
Key Considerations
One of the main considerations is eligibility for Business Rates and how a licence to occupy can affect this.
For a property to be eligible for Business Rates, it must be available to book for at least 140 days per year and let for at least 70 days. However, the Valuation Office Agency or HMRC may argue that the property has not been “available” in the usual holiday-let sense. To avoid any risk, we recommend that your property continues to meet the 140/70 thresholds, ensuring that offering a licence to occupy does not affect your Business Rates. For more detailed information, you can consult the government website.
Another key consideration is working with a reputable agency that can support you throughout the process of setting up a licence to occupy for your property.
How Grandeur Property Can Help
Not all agencies or online booking platforms are equipped to support both short-term lets and licence to occupy bookings. At Grandeur Property, we recognise the potential benefits for our owners in accepting both short-let and medium-length stays. We have therefore undertaken the work required to make this a viable and secure option.
We have collaborated with specialist property lawyers and consulted our professional association to develop a clear, legally sound agreement. This framework helps secure longer, out-of-season bookings where commercially appropriate.
With Grandeur, the process begins with an agreement with the owner, ensuring they are comfortable with the rental value, duration, and time of year we propose to offer their property. Our aim is to enhance the owner’s property business, so the terms are always designed to work for them first and foremost.
If you would like to find out more about renting your property as a short let that can also accept medium-length licence to occupy bookings, please get in touch. We would be happy to advise.
