Cotswolds, Cumbria Top UK's Most Profitable Holiday Let Locations

The Cotswolds, Cumbria, and the Lake District have emerged as the most profitable holiday let locations in the UK, according to recent research by Sykes Holiday Cottages. These picturesque regions are generating up to £28,500 annually in revenue for holiday let owners, outpacing the UK average of £24,500.

The Cotswolds secured the top spot, with holiday lets in this charming area earning an average annual income of £28,500. Cumbria and the Lake District followed closely behind, with an average annual income of £28,200. Dorset rounded out the top three, with holiday let owners in this coastal county earning an average of £27,000 per year.

Why this matters: The profitability of holiday let locations has significant implications for the UK's tourism industry and local economies. As the demand for staycations continues to grow, understanding the most profitable locations can inform investment decisions and shape regional development strategies.

Graham Donoghue, CEO of Sykes Holiday Cottages, commented on the findings, stating, "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."

Despite the positive outlook, holiday let owners face several changes in the coming years. Chancellor Jeremy Hunt announced in the 2024 Spring Budget that the furnished holiday lettings (FHL) regime will be scrapped, resulting in the loss of perks such as lower capital gains tax and full mortgage interest relief. Additionally, new licensing schemes for holiday rentals have been introduced in Scotland, with similar measures potentially coming to England and Wales.

Short-term lets in England will soon require planning permission for any properties that are second homes or empty. In Wales, holiday lets must be open to visitors for 252 days a year and be in use for 182 days to be eligible for business rates, or face a council tax premium.

Sykes Holiday Cottages' research reveals that 86% of property owners remain positive about the lettings market, with some even considering purchasing another let in the near future. Holiday bookings have seen an 8% rise year-on-year in 2023, up by an impressive 71% from pre-pandemic levels.

Key Takeaways

• Cotswolds, Cumbria, and Lake District top profitable holiday let locations.
• Average annual income for holiday let owners: £24,500 (UK), £28,500 (Cotswolds).
• Staycation demand drives growth, with 86% of owners optimistic about the market.
• New regulations: FHL regime scrapped, licensing schemes introduced in Scotland.
• Holiday bookings up 8% YoY in 2023, 71% from pre-pandemic levels.