Are UK holiday lets a profitable investment in the UK?

British staycations have become even more popular ever since restrictions first affected overseas travel. This trend shows no sign of relenting, as concerns about the cost of living are causing Brits to keep looking for holidays closer to home. These conditions mean that it’s shaping up to be a very rosy time for British property investors. 

Rental income

One survey found that 84% of prospective tourists were likely to go on a UK staycation in 2023, with 56% saying that the reason for this was the cost of living.

Many people have been using this trend as an opportunity to buy a property and then rent it out to holidaymakers.

2023 has seen some changes in legislation that may affect holiday owners. Holiday lets will need to be rented for at least 70 days per year and available to be rented at least 140 days per year to qualify for business rates on tax. All the same, this is still a profitable time to buy a holiday rental in parts of the UK where tourism is high, such as coastal towns and picturesque villages. 

Appreciation in value

If you’re thinking about a holiday rental investment, carefully consider the type of property you buy. Log cabins and caravans tend to depreciate, so, if you can, steer towards a property type that is more likely to appreciate. A holiday cottage may well be more expensive to buy, but there’s a better chance it will appreciate.

How to make the most out of your investment

As a long-term investment, you’ll only get the most out of your property if you work at it. You can earn more by taking certain measures: 

• Carefully consider your pricing. Setting a happy medium, that is neither so expensive that it deters potential guests nor so cheap that it’s unprofitable, is key. Stay attuned to the market so that you can change your prices in line with demand and remain competitive. 

• Let your guests bring their pooches. With more Brits looking for staycations, the demand for a dog-friendly stay is on the rise too. Make your holiday rental a welcoming space for furry friends and you could attract a lot more holidaymakers!

• Keep your property up to the best standard with the right holiday home insurance. Many owners consider taking this out to protect their property. Without it, unforeseen difficulties may mean you have to put the brakes on your business temporarily, which is an expense in itself.

• Invest in professional images. After you’ve decorated and spring-cleaned your holiday rental, flaunt it! A professional photographer knows exactly how to capture your accommodation with the most flattering angles and lighting. When uploaded to your website or listing, beautiful images can do wonders for your business.

If you’re thinking of investing in a holiday rental during this boom, we don’t blame you! Consider the location and the pricing system so that you can make your money back. And by taking an active role in making your rental feel like a home, you increase your chances of accelerating your profits.