So basically it would become a gamble that they pay rather than an investment backed by good collateral.

Surprising really.Very suspect about blacklists, don't get me wrong, i'd love to enter some names, but there is a process in existence thats called the court service and public records.I remember several years ago that a blacklist for tenants was created in the UK and the owner/operators got their asses sued off.

I am from the UK and if you are investing in London (which is higher than anywhere else in the UK by a long way), you are going to be way off with your national average rule. 

It seems taking a gamble on a property that's not even yours seems to be a high risk financially.http://www.biggerpockets.com/forums/12/topics/380162-went-bankrupt-trying-to-wholesale-heres-my-sage-advice

Are you against casinos, because some people get addicted to gambling?

We currently have moved to London, UK for a new start and our real estate investing took a bit of a back burner.

REI is like playing poker (not because it's gambling).  

The message I took from this was, only gamble what you can afford to lose and only do it if that loss doesn't change your lifestyle or standard of living.

It is still widely used in the UK, although new laws now allow leaseholders to buy the freehold (fee simple).

Hopefully, the gamble will pay off.Where and what you buy will make a huge difference in terms of what you need to do to get an STR permit, how long you'll wait for other permits if you are building or remodeling, what the STR rules and restrictions are (none of the jurisdictions are onerous, but there are differences between 29, YV, and the county), and so forth.