PriceLabs report shows London holiday let prices surged 17% despite fewer bookings

UK: According to the latest PriceLabs STR Index, holiday let prices in London increased by 17% year-on-year in June, despite a 10.9% drop in occupancy compared to the previous year. This surge in prices occurred during one of the hottest Junes on record, with fewer travellers opting for stays in the capital.

The Index, which tracks over 300,000 short-term rental listings across the UK, revealed that occupancy in London was 10.9% behind last year’s levels. Despite lower visitor numbers, hosts maintained high prices, driven by inflation and rising operational costs. Property managers may be holding firm on rates, expecting a last-minute boost in demand during the summer.

Nationally, heatwave-driven demand along the coast contributed to a 7% increase in average daily rates, reaching £139, although overall occupancy dropped slightly to 61.3% (down from 62 per cent in June 2024) . The influx of new short-term rental properties has added to market competition.

Seaside destinations saw a rise in occupancy, with Cornwall (+3.3%), Wales (+2.9%), and Devon (+0.7%) attracting more holidaymakers seeking cooler conditions. However, last-minute bookers limited ADR growth, with rates only rising 1.1% in Cornwall and falling 4.4% in Devon.

Looking ahead, forward-looking data indicates a slowdown in occupancy, with UK occupancy for July pacing 8.9% lower than last year, and August occupancy trailing 7.2%. Nevertheless, nightly rates for July (£145) and August (£149) have shown growth, suggesting hosts are optimistic about rising demand later in the summer.

In Edinburgh, bookings are also down, with August occupancy lagging by 2.4% ahead of the Fringe Festival. However, hosts have increased rates in anticipation of strong last-minute bookings.

Richie Khandelwal, president and co-Founder of PriceLabs, commented: “Demand patterns across the UK are shifting as guests wait longer to book. While rates remain high, slower occupancy growth indicates that economic factors and weather uncertainty are influencing booking behaviour. Hosts should stay informed about both local and national trends to adjust their pricing strategies accordingly.”

Highlights:

• London holiday let prices increased by 17% year-on-year in June 2025, despite a 10.9% drop in occupancy.

• National ADRs rose by 7% to £139, with seaside destinations like Cornwall, Wales, and Devon seeing occupancy gains.

• Last-minute bookings are on the rise, with hosts maintaining high rates despite slower occupancy growth.

• Forward-looking data indicates a slowdown in occupancy for July and August, but nightly rates remain resilient.

• Edinburgh experiences a 2.4% drop in August occupancy ahead of the Fringe Festival, with hosts increasing rates in anticipation of strong last-minute demand.