{"id":8798,"date":"2023-08-02T08:28:21","date_gmt":"2023-08-02T08:28:21","guid":{"rendered":"https:\/\/www.mouthymoney.co.uk\/?p=8798"},"modified":"2025-03-03T09:10:23","modified_gmt":"2025-03-03T09:10:23","slug":"can-you-make-money-from-holiday-lets","status":"publish","type":"post","link":"https:\/\/www.mouthymoney.co.uk\/mortgages\/can-you-make-money-from-holiday-lets\/","title":{"rendered":"Can you make money from holiday lets?"},"content":{"rendered":"\n

Nick Daws explores the possibilities of earning income from holiday lets<\/h3>\n\n\n\n
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Tourism in many parts of the UK is booming right now. <\/p>\n\n\n\n

As we exit the pandemic some people are venturing abroad again. But many others (perhaps partly due to the cost-of-living crisis) are discovering – or rediscovering – what this country has to offer. <\/p>\n\n\n\n

This in turn has led to a growing demand for holiday rentals. That is only likely to increase as overseas visitor numbers return to pre-pandemic levels as well.<\/p>\n\n\n\n

There is undoubtedly money to be made from holiday lets, so today I shall look at this subject in more detail.<\/p>\n\n\n\n

How much can you make?<\/h3>\n\n\n\n

Being a holiday-let landlord has many attractions, including significantly higher returns than are achievable from residential buy-to-lets.<\/p>\n\n\n\n

An apartment in a popular tourist area, for example, can generate \u00a31,000 a week or more (in peak season at least). <\/p>\n\n\n\n

A recent report in Which?<\/em> found that the average annual yield on a holiday let was just over 10%. This compares favourably with residential buy-to-lets, where around 7% a year is typical. The Which?<\/em> article mentioned above forecasts holiday-let yields rising in future to 14% or more.<\/p>\n\n\n\n

According to Sykes Holiday Cottages<\/a>, the average holiday let owner is earning approximately \u00a328,000 per year. You can also enjoy cheap holidays staying at the property yourself. <\/p>\n\n\n\n

And there are tax advantages too, as running a furnished holiday let (FHL) is considered a trade rather than an investment. This means you can offset mortgage interest costs against your income, as well as council tax and other bills.<\/p>\n\n\n\n

On the downside, being a holiday-let landlord is likely to be more hands-on. New tenants will move in every few days and the property will need to be cleaned, tidied and restocked on a regular basis. Covid precautions added an extra dimension to this (though rules are now easing). <\/p>\n\n\n\n

There will be more admin dealing with a steady stream of enquiries and visitors. You will need to budget for advertising too, or risk \u2018voids\u2019 when your property is empty and you are losing rather than making money.\u00a0 And finally, any garden at the property will need tending as well.<\/p>\n\n\n\n

You can of course outsource some (or all) of this work to a management agency, but naturally there will be a cost to this, impacting your bottom line.<\/p>\n\n\n\n

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A warning on the future of holiday lets<\/h3>\n\n\n\n

Holiday lets have proven to be an excellent alternative for many wouldbe landlords instead of the traditional buy-to-let routes.<\/p>\n\n\n\n

But resentment from coastal communities to people who buy up property is rising and this has led to a political backlash of sorts.<\/p>\n\n\n\n

In April, levelling up secretary Michael Gove announced a series of reforms <\/a>to the holiday let market that would force owners to apply for planning permission before being able to use their property as a holiday home rental. <\/p>\n\n\n\n

The details of the policy are not yet finalised but it is worth anyone considering entering the space keeping an eye on developments. <\/p>\n\n\n\n

The Mouthy Money editors<\/strong><\/p>\n<\/div><\/div>\n\n\n\n


Setting and location<\/h3>\n\n\n\n

You won\u2019t be surprised to hear that setting and location are two key considerations for would-be holiday-let landlords.<\/p>\n\n\n\n

A recent survey by Suffolk Building Society<\/a> found that for potential holiday-let buyers the setting of a property was more important than other factors such as renovation potential or proximity to amenities. <\/p>\n\n\n\n

According to the SBS survey, key aspects for would-be landlords when considering buying a holiday let were:<\/p>\n\n\n\n