For anyone relocating, working a long contract, or bridging a property move, luxury serviced apartments in London for long stays often sit in a sweet spot between a hotel and a rented flat. You get a fully furnished home with hotel-style services, the flexibility to stay for weeks or months, and — thanks to a quirk in the VAT rules — a noticeably lower effective tax rate once you pass 28 nights.
This guide explains what these apartments actually offer, how the long-stay savings work, what to budget, the rules that apply in the capital, and where the best options tend to cluster. It is general information rather than tax or legal advice, so confirm anything specific to your situation with a qualified professional.
What a serviced apartment actually is
A serviced apartment is a furnished, self-contained home let on a flexible basis with hotel-style extras such as housekeeping, linen, Wi-Fi and, in the smartest buildings, a concierge or reception. It sits between two more familiar options: a hotel room and a standard rented flat.
The key differences are worth understanding before you book:
- Unlike a hotel, you get a full kitchen, separate living space and the feel of a home rather than a room.
- Unlike a standard tenancy, you usually occupy under a licence to occupy rather than an assured shorthold tenancy, with bills typically bundled into one payment.
- Stays are flexible, ranging from a few nights to several months, which is what makes them suitable for long stays in the first place.
For relocations, corporate placements and renovation periods, that combination of space, service and flexibility is the main draw.
Why long stays can be more cost-effective
Here is the detail that catches most people by surprise. Serviced apartments are treated like hotel accommodation for VAT, so the standard 20% rate applies to the first 28 nights of a continuous stay. From the 29th night, HMRC’s reduced value rule kicks in.
Under that rule, set out in VAT Notice 709/3 and the VAT Act 1994, VAT from night 29 is charged only on the services element of the bill — a minimum of 20% of the charge — rather than the accommodation itself. The practical effect is that the effective VAT rate on a long stay falls to around 4%, provided the stay is genuinely continuous. You can read the detail in HMRC’s guidance on accommodation VAT.
Two conditions matter:
- The stay must be unbroken. If you check out and back in, the 28-day clock generally restarts.
- The saving applies to the accommodation, not to extras such as parking, meals or additional cleaning, which stay standard-rated.
This is why a serviced apartment that looks expensive on a nightly basis can become competitive — sometimes cheaper than a hotel — once you are staying for a month or more.
Serviced apartment, hotel or standard rental?
The right choice depends on how long you are staying and how much flexibility you need. The table below sets out the broad trade-offs.
| Feature | Serviced apartment | Hotel | Standard rental |
|---|---|---|---|
| Typical minimum term | A few nights | One night | Usually 6–12 months |
| Bills and Wi-Fi | Usually included | Included | Usually separate |
| Housekeeping | Regular | Daily | None |
| Space and kitchen | Full flat and kitchen | Room only | Full flat |
| Long-stay VAT relief | Yes, after 28 nights | Yes, after 28 nights | Not applicable (rent is exempt) |
| Commitment | Low to medium | Lowest | Highest |
For a true long-term move where you want to put down roots, a conventional tenancy may still work out cheaper. For anything from a few weeks up to several months, a serviced apartment usually wins on convenience.]
What “luxury” and “long stay” tend to mean
Definitions vary between providers, but a few conventions are common across the London market. “Long stay” generally refers to bookings of 28 nights or more, which is also the threshold for the VAT saving. At the luxury end, you can expect a higher standard of finish and a broader service offer.
Typical luxury inclusions are:
- A prime or central location, often within a managed residential building or aparthotel.
- Concierge or 24-hour reception, secure access and sometimes a gym, pool or residents’ lounge.
- High-specification kitchens, quality furnishings and regular, more thorough housekeeping.
- Flexible check-in, longer-stay discounts and dedicated guest support.
The more services bundled in, the more the apartment behaves like a hotel — and the more of the bill may sit in the standard-rated services category for VAT.
Costs and what to budget
Pricing is quoted per night or per week, and almost always includes utilities, Wi-Fi and council tax, which makes budgeting simpler than a standard let where those are extra. For context, the average private rent across London was around £2,294 a month in 2026, according to Office for National Statistics data — and a central luxury serviced apartment will typically price above that, with the gap narrowing the longer you stay.
When comparing options, factor in:
- Whether the headline rate is inclusive of VAT and bills, or shown before tax.
- Any security deposit, and the cancellation or early-departure terms.
- Whether the long-stay reduced VAT rate has been applied correctly from night 29.
- Extras that are charged separately, such as parking, additional cleans or pet fees.
Businesses that are VAT-registered can usually reclaim the VAT on a long stay with a valid invoice, which can make serviced apartments particularly attractive for corporate bookings.
The rules that apply in London
London has specific short-let rules that long-stay guests should understand, even though they mostly affect the operator rather than the guest. Under the Deregulation Act 2015, whole-property short lets in Greater London are capped at 90 nights per calendar year before planning permission is required. Crucially, stays of more than 90 consecutive nights, and longer corporate-style lets, generally fall outside that short-let cap — which is part of why the long-stay model exists.
A few other points are worth flagging:
- Serviced apartments are usually let on a licence to occupy, which gives different rights from an assured shorthold tenancy. Check what your agreement actually is.
- A national registration scheme for short-term lets is expected to be introduced, using powers in the Levelling Up and Regeneration Act 2023, so the regulatory picture is still evolving.
- Always check the provider is reputable and the building is properly managed, particularly for longer commitments.
If your stay is genuinely long term, it is worth asking whether a standard tenancy would give you more security and a lower cost.
Where to look in London
Serviced apartments cluster where demand from relocating professionals, business travellers and visiting families is highest. Choosing the right area is often about matching your commute and lifestyle rather than chasing a postcode.
- Mayfair, Marylebone and Kensington: the traditional luxury core, strong on prestige and concierge service.
- The City and Canary Wharf: convenient for finance and professional placements, with many purpose-built aparthotels.
- South Bank and Southwark: central, well connected and increasingly popular for longer stays.
- Greenwich and the eastern docklands: often better value while staying within easy reach of the centre.
If you are using a serviced apartment as a base while deciding where to live, treat it as a chance to test a neighbourhood before committing to a longer lease or a purchase.
The bottom line
For stays of a month or more, luxury serviced apartments in London for long stays can combine the comfort of a home, the convenience of hotel service and a lower effective VAT rate, which together make them a genuinely practical option for relocations and extended trips. They are not always the cheapest choice for a true long-term move, so weigh them against a standard tenancy and confirm the costs and contract terms before booking. As ever, take professional advice on anything tax-related, because the savings depend on the detail.
Frequently asked questions
How long is a “long stay” in a serviced apartment?
It usually means 28 nights or more, which is also the point at which the reduced VAT rate applies. Many providers offer better nightly rates for longer bookings.
Do I really pay less VAT on a long stay?
Yes — VAT is charged at 20% for the first 28 nights, then from night 29 only the services element is taxed, giving an effective rate of around 4%. The stay must be continuous for the relief to apply.
Are bills included in serviced apartments?
In most cases utilities, Wi-Fi and council tax are bundled into the rate. Always confirm what is included and whether the price shown is inclusive of VAT.
Is a serviced apartment a tenancy?
Usually not — most are let under a licence to occupy rather than an assured shorthold tenancy, which carries different rights. Check your agreement and seek advice if you are unsure.
