UK’s Most Lucrative Locations For Holiday Let Income
The Cotswolds is the most lucrative place in the UK for holiday let income, according to Sykes Holiday Cottages.
With annual incomes averaging £28,500, versus a UK average of £24,500, the region has taken the top spot away from Cumbria and the Lake District (£28,200) which has dropped into second place.
Dorset (£27,000) and Cornwall (£26,500) follow closely behind in the new ranking, while other common UK holiday hotspots like the Peak District (£26,500) and the Scottish Highlands and surrounding islands (£25,100) also feature in the top ten.
Meanwhile, Northumberland (£25,000) and East Anglia (£24,900) are two new contenders to feature in the ranking, going from 19th and 18th to 7th and 8th.
The Holiday Letting Outlook Report 2024 analyses Sykes ’ revenue data and booking figures to drill into the income potential of holiday letting in the UK. This is alongside a survey of holiday let owners to review their opinions on recent regulatory and tax changes and expert-led commentary on the future of the sector.
According to a poll of 500 UK holiday home owners commissioned for the report, 65% are worried about the recent changes introduced to the sector, with increased taxes causing the most concern.
However, despite this concern, the majority (86%) of holiday let owners have not ever considered exiting the market, with half of owners even contemplating buying another holiday let in the future regardless of the changes.
Separate research from the Professional Association of Self-Caterers also found that the potential removal of the furnished holiday let tax regime may not actually impact the majority of holiday let owners, with an estimated 57% of holiday let owners not having a mortgage on their property and therefore less likely to be impacted.
According to calculations by Sykes’ specialist tax advisory partner, Zeal, those that are impacted by this latest change – which isn’t planned until April 2025 – could lose an average of £1,890 a year in tax, based on an average mortgage balance in the UK of £189,000, and assuming they are a higher rate tax payer.
Sykes’ research also found that 81% of holiday let owners say residents local to their holiday lets welcome tourism and somewhat rely on it, with nearly all (96%) stating that it is unlikely a local person would even purchase their let if they did ever sell it.
Holiday let owners also have reason to remain optimistic as the demand for staycations is still growing, with bookings for Sykes’ holiday lets over the recent Easter school holidays up 11% compared with last year.
Sykes chief executive Graham Donoghue, says: “Staycations have been growing in popularity over the past decade and right now demand for our UK holiday cottages is higher than ever, with the average annual income of a holiday let owner up as a result. But the past 12 months have been slightly different for the industry, and our latest report therefore also reflects how holiday let owners are feeling in light of the recent changes.
“Despite changes, it is clear that holiday letting remains a profitable and rewarding long-term business model, with the nation’s love of holidaying at home and exploring our incredible country going nowhere. The Cotswolds, in particular, has had a positive year, claiming the top spot for earnings across the UK.”
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