Towns and villages in the Cotswolds and Cumbria are among the best places in the UK to own a holiday let, according to a report by Sykes Holiday Cottages.
Owners in the Cotswolds generate the most gross income overall, with the average owner in the area earning £29,000 in 2024, up £500 year-on-year.
Looking at smaller areas, the Lake District village of Grasmere in Cumbria generates the most income, with holiday let business there now earning £43,200 on average annually.
Looking at the UK average, holiday let businesses generated an income of £24,700 last year – slightly up on 2023 (£24,500), despite tougher economic conditions.
James Shaw, managing director of Sykes Holiday Cottages, said: “Staycation bookings are strong – particularly to regions like the Lake District and the Cotswolds that are appealing for short breaks all year round, which translates into higher earnings for owners.
“Location is obviously incredibly important in the earning-potential of holiday lets, but other small investments and decisions can drive additional income too, including accepting short mid-week stays, adding a hot tub and allowing pets – these are all things we advise our owners on.
“Despite significant change in the industry, the findings throughout our report show the resilience of the holiday let market, with average incomes up last year. The owners we speak to are feeling good about the future and their prospects within the sector, but many say they have already been affected by new rules and regulations introduced.”
Concerns around industry changes
Although average annual earnings are up slightly, many owners are concerned about the impact recent and upcoming regulatory and tax changes will have on their businesses – especially in the context of other rising running costs.
Almost half (45%) of UK owners say they’ve already been affected by regulation changes, which increases to 63% of those in Wales.
Owners say rules allowing some councils to charge increased rates of council tax are most impacting their businesses, with nearly six in 10 (58%) affected.
A third (33%) of owners say they will be impacted by the removal of the Furnished Holiday Lettings tax regime in April. A similar number (32%) have been affected by the policy in Wales upping the minimum number of days you’re required to let your property to qualify for business rates.
What’s more, nearly three-quarters (74%) of short-term let owners believe the recently introduced Government measures risk having a significant bearing on the local economies where their holiday lets operate.
Ben Spier,head of regulation and policy at Sykes, added: “Unfortunately, over the last two years, small holiday let businesses have been caught up in policies aimed at improving housing availability.
“We’re working hard to lobby the Government to distinguish between holiday lets, that bring tourism to the area and generate spend locally, and second and empty homes that comparatively contribute nothing.
“Instead of penalising holiday let businesses, government focus should shift to building new homes or policy tackling the many more properties and land that lay vacant.”
