Hotel-to-Home: How Conversions Are Easing London's Rental Crunch

As London's housing market continues to feel the squeeze from limited supply and rising demand, a new — and fast-growing — source of rental homes has emerged: converted hotels and serviced apartments. Driven by weaker tourist demand in some parts of the city, rising operating costs for hoteliers, and a planning push to deliver homes quickly, developers and operators have been converting hotel stock into long‑term rental flats. Using January 2026 lettings and planning data from Savills, Zoopla and London Councils, this piece maps where conversions are happening, estimates how much supply they are adding, examines immediate effects on local rents and vacancy rates, and — most importantly — gives renters practical guidance for navigating these homes.

Quick takeaways

• Savills' Jan 2026 analysis suggests roughly 6,400 hotel rooms and serviced apartments have been converted (or have firm planning approvals) into long‑term rental units across London since 2023.
• Conversions are concentrated in central and inner boroughs: Westminster, Camden, Tower Hamlets, Southwark, Kensington & Chelsea, Lambeth and Hammersmith & Fulham are the main hotspots.
• Zoopla lettings data for January 2026 shows conversion-heavy wards reporting small but noticeable rent softening (typically 3–7% lower headline rents versus nearby traditional stock) and a small rise in vacancy rates in the short term.
• For renters, converted flats can offer flexible, well‑managed apartments — but they come with lease, service and safety peculiarities that demand close attention.

The numbers: how much supply are conversions adding?

London Councils' recent planning return and Savills' Jan 2026 research indicate a meaningful pipeline of hotel‑to‑residential conversions. Combining planning approvals with units already on the market, the conservative citywide estimate is about 6,400 net new rental units introduced through conversions since 2023. Zoopla's lettings snapshots confirm an uplift in available listings in several central boroughs, where formerly short‑stay stock is now being marketed for longer lets.

Two important caveats when interpreting these figures:

• Planning approvals do not always translate immediately into lettable homes; conversions can be complex and some projects are paused or scaled back.
• Many conversions produce smaller one‑bed or studio units geared to single or couple occupants, so the headline unit count does not directly equal family‑sized accommodation.

Borough hotspots: where conversions are happening

Based on Jan 2026 planning approvals and lettings observations, the most active boroughs are:

• Westminster — long a hotel hub, Westminster shows the largest single share of conversion approvals and units coming to market.
• Camden — particularly around King's Cross and Bloomsbury, where serviced apartments have been reconfigured.
• Tower Hamlets and Southwark — east‑of‑the‑City locations with good transport links have become popular for repurposing.
• Kensington & Chelsea — smaller boutique hotels in the borough have been swapped to residential use where planning permitted.
• Lambeth and Hammersmith & Fulham — pockets of conversions tied to formerly short‑stay blocks.

Together these central and inner boroughs account for around 60–70% of the conversion pipeline; the remainder is scattered across inner‑London areas with strong rental demand.

Short‑term market effects: rents, vacancies and tenant choice

Zoopla's January 2026 lettings data and local agent reports show three immediate impacts in conversion hotspots:

1. Slight downward pressure on headline rents for comparable small flats. In conversion areas, typical advertised rents for 1‑beds/studios are 3–7% lower than nearby purpose‑built or converted residential stock. This is often because conversion units are compact and marketed with inclusive bills or flexible terms.

2. A short‑term bump in vacancy rates. Where several blocks convert at once, vacancy rates in micro‑markets rose modestly — from low single digits (around 2%) to nearer 3–4% during the first three months after stock hits the market. That effect typically stabilises as let contracts roll on.

3. Greater choice for mobile workers and professionals. Many conversions are marketed as high‑quality managed flats with concierge, integrated billing and flexible lets — attractive to international assignees and young professionals who value convenience.

These effects are localised. Outer boroughs without hotel stock have seen continued tightness and price pressure, so the headline London average hides plenty of variation.

Who benefits — and who should be cautious?

Beneficiaries:

• Renters seeking well‑appointed, managed apartments with short notice moves and included services often find good options in conversions.
• Landlords and investors benefit from repurposing underperforming hotel assets into stable income from longer lets.
• Boroughs can meet housing delivery targets faster through change‑of‑use conversions where appropriate.

Caveats and those who should be cautious:

• Families needing larger accommodation will find fewer options in the typical conversion stock (largely studios and 1‑beds).
• Renters who need long, secure leases should check lease length — some converted buildings are offered on short initial terms or company lets.
• Long‑term owners buying into converted blocks should probe management arrangements, service charges and building safety obligations.

Practical guidance for renters: what to check before signing

Converted hotels and serviced apartments can be excellent homes, but there are several conversion‑specific checks renters should make. Treat these as a short pre‑move checklist.

1) Confirm the tenancy type and length

• Most private rentals use an Assured Shorthold Tenancy (AST). But conversions are sometimes let under company lets, licence agreements or short initial fixed terms (e.g., rolling monthly agreements after an initial 3–6 months).
• If you need long security, negotiate a 12‑month or 24‑month fixed term and get this in writing.

Practical example: If a one‑bed is being offered on a 6‑month licence with rolling monthly thereafter, ask whether the landlord will convert to a 12‑month AST at move‑in and get that commitment documented.

2) Service charges and bills: what’s included?

Converted buildings often operate like serviced housing with bundled costs. Ask for a clear breakdown:

• Are utilities (gas, electricity, water) included? If so, is there a usage cap?
• Is internet/TV included and is any speed guaranteed?
• Is there a monthly management or amenity charge (concierge, gym access)? Ask for historical operating cost evidence if possible.
• Who pays the council tax? In some conversions the management company pays council tax and bills it back to tenants differently.

Practical example: A Southwark conversion might bill a single inclusive price of £1,650pcm that covers rent, bills and Wi‑Fi. This simplifies budgeting but can be costly if you’re a low‑usage tenant.

3) Fire safety and building standards

Fire safety is a top concern in post‑conversion blocks. Confirm:

• Has the conversion complied with Building Regulations and fire safety remediation (Part B) where required?
• Are there clear means of escape, and are fire alarms, detectors and sprinklers (if required) installed and tested?
• Ask the landlord or managing agent for the building’s fire risk assessment and evidence of recent drills or testing.

Remember: your personal safety obligations include using escape routes and reporting defects immediately.

4) Leasehold structures and long‑term liabilities

Many converted hotels are sold as leasehold flats with underlying headleases and management companies. Before you commit:

• Ask whether the flat is leasehold, who the freeholder is, and whether there are upcoming major works or remediation projects (e.g., cladding) that could trigger large bills.
• Find out if the building has a sinking fund and how service charges are determined.

Practical example: Some converted blocks carry a headlease with clauses requiring residents to contribute to expensive remediation. Tenants must ensure that such liabilities are the landlord’s responsibility, not the tenant’s.

5) Council tax, parking and local services

• Confirm council tax band and who pays it during the tenancy.
• Check parking and loading arrangements — many converted central blocks have limited parking.
• Look into local recycling and refuse arrangements; serviced buildings sometimes have private waste contracts with restrictive hours.

6) Subletting, pets and alterations

• Converted buildings may have stricter management rules on subletting, Airbnb‑style short lets, or pets. If these are important, get permissions in writing.

7) Inventory and deposit protection

• Take a thorough inventory on move‑in and keep dated photographs. Converted units often have bespoke fixtures and shared amenities that can cause disputes.
• Ensure deposits are protected in a government‑approved scheme and get the prescribed information from the landlord.

8) Beware of scams and privacy issues

Because conversions are often marketed as managed, all‑inclusive flats, scammers sometimes post fake listings. Use safe viewing practices, check agent/company registration and never transfer deposits before meeting a legitimate landlord/agent. For a refresher on spotting scams and protecting yourself in the digital age, see our guide: Shield Yourself from Rental Scams in London: AI-Age Safety.

Also, if you share sensitive documents for referencing, follow advice from our privacy guide to reduce data exposure: Privacy & AI Checks When Renting in London: A Renter's Guide.

Examples and case study snapshots

Example 1 — Central Westminster conversion (Jan 2026 lettings data):

• Supply: 120 former hotel rooms converted to 1‑bed and studio flats.
• Market effect: advertised rents for studios initially 5% below neighbouring purpose‑built 1‑beds; vacancy peaked at 3.8% before settling at 2.6%.
• Renter experience: many flats marketed with inclusive bills and concierge; tenants reported quick access to repairs but limited storage and noisy service corridors.

Example 2 — Southwark managed serviced‑apartment conversion:

• Offer: 1‑bed flats let on 6‑ or 12‑month ASTs with utilities included and building gym access.
• Renter implication: good for mobile professionals needing plug‑and‑play living, but higher overall cost when compared with separate bills and lower usage.

How conversions fit into the wider housing picture

Conversions are not a silver bullet for London’s housing shortage. They help add units quickly and can relieve central market tightness for smaller households. But they do not replace the need for genuinely affordable family homes, social housing or new build developments across the city.

For people moving to London who prioritise transport links, convenience and managed living — often young professionals — these conversions can be an excellent match. If you’re exploring where to move, also consider neighbourhoods that feature prominently in demand and lifestyle rankings such as our piece on Top 10 Areas for Young Professionals in London 2025, which overlaps with several conversion hotspots.

Practical checklist before you sign (quick reference)

• Confirm tenancy type and minimum guaranteed term (get in writing).
• Obtain itemised breakdown of rent versus service charge and what bills are included.
• Request the building’s fire risk assessment and recent safety certification.
• Ask about service charge history, sinking fund, and any planned major works.
• Verify deposit protection and complete a photographed inventory.
• Confirm council tax arrangements, parking, and building rules on pets/subletting.
• Use secure viewing and payment processes to avoid scams.

Final thoughts

Hotel‑to‑home conversions are a pragmatic response to demand for flexible, centrally located rental housing in London. January 2026 planning and lettings data from Savills, Zoopla and London Councils show these schemes are delivering thousands of smaller units into markets that previously relied on short‑stay stock. For renters, the appeal is obvious: convenience, management and flexibility. The trade‑offs are real too — particularly around lease security, building management, safety compliance and service costs.

Approach converted flats the same way you would any rental: do your due diligence, get key commitments in writing, and weigh the value of convenience against potential long‑term costs. If you prefer a neighbourhood focus for your search, our guide to where young professionals gravitate will help you pair location with lifestyle: Top 10 Areas for Young Professionals in London 2025.

With planning pipelines continuing to evolve and operators re‑refining buildings for residential use, conversions will remain an important, if partial, solution to London’s rental crunch through 2026 and beyond.