As many as 3.2 million homeowners are planning to rent out parts of their property or their whole property as a short term let, or take part in a house swap during the next 12 months, according to new analysis by Direct Line.

The research found that of those homeowners already taking part in short term lets, two-thirds swap houses (63%) or rent out their whole property (69%).

58% already rent out a room in their property on a short term basis, as they seek to earn extra cash and holidaymakers look for alternatives to traditional accommodation choices.

On average, homeowners expect to receive approximately £54 per room per night in rental income. During a week’s holiday, this could amount to around £758 for an owner of a two bedroom property.

Under plans to remove 40 year old rules preventing Londoners from renting out their homes on a short term basis, something which doesn’t apply elsewhere in the country, the Deregulation Bill will give home owners in the capital the freedom to rent out their homes on a temporary basis without having to pay for a council permit. Current laws state that private homeowners in the capital must apply for planning permission if they wish to rent out their home for less than three months.

The research found that London homeowners expect to receive the highest rental income, with an average of £116 per room per night, which could earn two bedroomed property owners some £1,629 over seven nights as savvy homeowners seek to capitalise on sporting events like Wimbledon in the capital.

At the other end of the spectrum, Scottish based homeowners expect to receive the lowest, at £31 per room per night. However, this could still earn owners of two bedroomed properties around £435 over the course of a week, which Glasgow based homeowners may wish to take advantage of during the Commonwealth Games.

Direct Line has warned that homeowners should be aware of the risks involved, as only 29% of UK homeowners who have rented out their property for a short period report never having incurred any damage.

It said homeowners who have rented out for a short period say they have experienced damage to furniture 29%, soft furnishings 27%, windows, doors and walls 26%, electrical items 16% and white goods 14%. One in four of these respondents reported theft of items from the house (24%) and home emergency damage, such as plumbing, heating or drainage (23%).

Louise Lumley, head of Select Premier Insurance, said: “Short-term lets can be a fantastic means of generating additional income, especially around holiday season. It is vital however, that homeowners take the time to protect their properties, as bills to repair or replace items as a result of damage can be expensive and may cost more than the amount earned from the rental.

“We recommend property owners inform their insurer, as their requirements may be different if letting out their home and this will protect against damage caused.”