Despite Jeremy Hunt’s recent Budget announcement, numerous tourist destinations continue to voice support for holiday lets due to their business opportunities and positive impact on the local economy.
Oliver believes holiday lets remain a good investment.
Since Covid, Brits have increasingly opted for staycations, causing a surge in demand for holiday rentals. The annual turnover for a UK holiday let rose to £24,000 in 2022 on average, up 59% from 2019, as per Sykes’ Holiday Letting Outlook Report 2023.
While long-term rentals may require less involvement from investors, holiday lets have the potential for higher returns, with added benefits of capital appreciation, particularly in prime locations.
On average, holiday lets owners invest £7,400 annually in their properties, excluding mortgage payments, according to Sykes’ report. However, choosing the right location can significantly increase rental income compared to a standard buy-to-let.
Even if rented for only 36 weeks a year, holiday lets can yield substantial returns. For instance, a four-bedroom holiday let in Cheshire in the North West, priced at £256,526, could generate £45,549 annually, according to Sykes’ report. Why not learn how to make money on buy to let property with our free guide.
Analysis by TaxWatch indicates that under the Furnished Holiday Let (FHL) regime, property owners earning £30,000 in rent can save £4,000 per year in income tax. While changes announced in the Budget may impact profits, holiday lets can offer attractive returns.
Browse some of our buy-to-let area guides for more property investment insights:
