Edinburgh Tops UK Short-Term Rental Markets for 2026, Study Finds

UncommonDeal’s latest research has named Edinburgh as the premier UK market for short-term rental investments in 2026. Cambridge and Bath also feature prominently as top choices for investors aiming to capitalise on strong occupancy rates, competitive nightly prices, and steady demand throughout the year.

The study evaluated key UK short-term rental locations by analysing factors such as occupancy rates, average daily rates (ADR), annual revenue potential, tourism appeal, business travel frequency, affordability, and regulatory frameworks.

Findings indicate a shift among investors from focusing solely on headline nightly rates towards prioritising occupancy and overall annual revenue when evaluating investment opportunities. The report highlights that markets commanding high nightly prices do not necessarily yield the best returns if occupancy is low. Conversely, some areas with lower nightly rates outperform pricier markets by sustaining consistent demand year-round.

Edinburgh achieved the highest overall ranking due to its robust tourism sector, significant annual events, strong business travel presence, and persistently high occupancy levels. Cambridge secured second place, buoyed by demand from universities, research centres, corporate visitors, and international tourists. Bath rounded out the top three, benefiting from premium pricing and an established tourism industry.

The analysis also identified Manchester and Liverpool as compelling options for investors prioritising affordability and improved cash-on-cash returns. Although these northern cities may generate lower headline revenues compared to southern markets, their reduced property acquisition costs can enhance investment performance relative to capital outlay.

Key drivers behind the UK short-term rental market’s growth include rising demand from business travellers, relocation clients, contractors involved in infrastructure projects, university visitors, and domestic tourists. The sector is increasingly dominated by professional serviced accommodation operators who focus on guest experience, dynamic pricing strategies, operational efficiency, and multi-platform marketing, moving away from casual hosting models.

The report cautions investors to stay informed about regulatory changes impacting the sector, such as London’s 90-day rental cap, Scotland’s short-term let licensing requirements, and potential new restrictions from local authorities in various areas.

In addition to revenue potential, the research advises investors to carefully consider occupancy rates, acquisition costs, operating expenses, regulatory risks, and the sustainability of demand before committing funds to short-term rental properties.

The comprehensive analysis offers detailed comparisons of leading UK short-term rental markets, providing insights into revenue prospects, affordability, market dynamics, risks, and investment factors for 2026.