If you’re weighing up where to invest in a serviced accommodation property, the East
Midlands deserves a much closer look than it usually gets. While investors chase the
obvious hotspots of London, Manchester and Edinburgh, a quieter shift has been
happening across Nottingham, Derby and Leicester — and the latest market data
confirms it’s no longer a hidden gem.
The Numbers Don’t Lie
According to a VisitBritain / Lighthouse report published in 2026, the East Midlands is
now one of the UK’s top three fastest-growing regions for short-term rental supply,
sitting alongside the North East and Yorkshire. Nationally, new short-term rental supply
grew by around four per cent over the year — roughly 13,000 additional homes entering
the market.
That’s a striking figure on its own. But here’s the part that matters most to landlords:
despite this wave of new supply, average daily rates and revenues in April 2026 reached
their highest levels ever recorded. In a market where more competitors are entering,
demand has grown just as fast — and professionally managed properties are still
delivering strong, competitive returns.
That combination — rising supply and rising rates — is exactly what a healthy, maturing
market looks like. It tells us guests are choosing serviced accommodation over
traditional hotels in greater numbers, and that well-run properties are being rewarded
for it rather than squeezed by competition.
Why the East Midlands, Specifically?
Nottingham, Derby and Leicester each bring something different to the table, but
together they form one of the strongest regional cases in the country for serviced
accommodation investment.
Nottingham has built a reputation well beyond its city-break appeal. Two universities
bring a constant flow of visiting academics, parents and conference delegates. A
thriving business district, a growing legal and financial services sector, and a packed
events calendar — from Nottingham Forest matchdays to the Goose Fair and a
genuinely excellent live music and theatre scene — keep demand steady across
weekdays and weekends alike.
Derby is quietly one of the most under-served serviced accommodation markets in the
country relative to its economic weight. It’s home to Rolls-Royce, Toyota Manufacturing
UK and a dense cluster of engineering and aerospace supply chain businesses, which
means a reliable stream of corporate and contractor bookings that aren’t dependent on
tourist seasonality. For landlords, that translates into stronger midweek occupancy —
the nights that are hardest to fill with a typical Airbnb.
Leicester offers scale and diversity. A large student population, a major hospital and
university medical school, strong transport links via the M1 and East Midlands Airport,
and a vibrant, multicultural food and retail scene make it attractive to a genuinely broad
guest base — from business travellers and relocating professionals to families visiting
the city’s cultural quarters.
Crucially, all three cities sit within the same tight geographic triangle, connected by fast
road and rail links and all within reach of East Midlands Airport. For an investor building
a portfolio, that means one management operation can efficiently cover properties
across all three markets — something you don’t get with more scattered regional
strategies.
Value That Hasn’t Been Priced Out Yet
Property prices and yields across Nottingham, Derby and Leicester remain considerably
more accessible than in the UK’s established short-let hotspots. That gap between entry
cost and achievable nightly rate is precisely why the East Midlands is showing up in
national growth statistics — investors are recognising the returns available before the
wider market catches up and prices adjust.
The risk with any fast-growing market, of course, is competition. As the report highlights,
national supply is climbing quickly. This is where the difference between an amateur
listing and a professionally managed property becomes financially significant. The data
is clear that average daily rates and revenues are climbing despite more competition —
but that uplift is being captured by properties that are priced dynamically, presented
professionally and maintained to a consistently high standard. A well-managed three
bedroom house in Nottingham will comfortably out-earn three amateur listings
competing on price alone.
What This Means If You’re Considering Investing
If you’re a property owner — or considering becoming one — in Nottingham, Derby or
Leicester, the market conditions right now are about as favourable as they’ve been:
- Demand is proven and growing, not speculative. The revenue data confirms
guests are booking, and paying more to do so. - Supply is still catching up, meaning there’s genuine room to establish a strong
performing property before the market becomes saturated. - Corporate and business demand across all three cities (engineering,
manufacturing, universities, healthcare) provides a buffer against the
seasonality that affects purely tourist-driven markets. - Regional connectivity means a single, well-run portfolio strategy can work
efficiently across all three cities.
The opportunity won’t stay this open indefinitely. As more investors act on the same
regional growth data, competition for the best properties — and the best guests — will
intensify. The landlords who move now, and who partner with management that can
price, present and operate professionally from day one, are the ones best placed to
capture the returns this data is already showing.