The combined forces of Brexit and COVID-19 paved the way for a few years of staycation summers here in the UK. In the summer of 2020, when 77% of Brits had stated that they were planning a staycation summer, we wrote a piece describing the various ways in which investors could potentially capitalise on the opportunities that increased holidays on our own shores could bring.
This included investing in UK holiday lets. But with international travel now pretty much back to normal, is it still worth it – and where are the best places in the UK to invest?
Holiday lets remain popular
The Holiday Letting Outlook Report 2023, published by Sykes Holiday Cottages, combines their own letting data, consumer research and data from Oxford Economics. The report reveals that staycations remain popular, with holiday let bookings up 9% compared with 2022.
Half of the holiday let owners they surveyed stated that they have seen an increased demand for their properties since the pandemic ended, while 63% stated that they plan on increasing the size of their portfolios over the next five years. Turnover has also increased by 59% since 2019, with the average annual turnover for a single holiday property standing at £24,000 in 2022.
Of course, this varies by region, with some regions more popular than others for holiday lets.
The top five UK holiday let destinations
Sykes analysed their revenue figures to understand the locations with the highest letting revenues, with five key areas of the UK standing out.
The top five earning regions for 2022 are as follows, with the average annual income received from a single holiday let in the area.
- Cumbria and the Lake District (£28,000)
- Cotswolds (£28,000)
- Peak District (£27,500)
- Cornwall (£27,000)
- Dorset (£26,000)
Revenue incomes, as you’d expect, are even higher for larger properties, with a four-bedroomed property in Cumbria or the Lake District commanding an average of £44,000 in revenue in 2022.
In addition to short-term growth, Sykes also analysed the regions that they believe have the best potential for longer term investment. Through a combination of revenue growth and annual income data, occupancy levels, house price growth and more, they suggest that the top ten regions for long-term investment are:
- Lake District
- Peak District
- Dumfries and Galloway
- North Yorkshire
Of course, as with any investment, holiday let investments may not always succeed: factors such as disposable income levels, general economic conditions, mortgage rates, house price changes and the level of investment needed to maintain a property can all impact on your chance of success. However, it seems that there are certain areas of the UK where holiday property investors could focus their attention should they wish to begin or grow their portfolios.
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