Investment hotspots for holiday homes in the United Kingdom by 2025
In the ever-evolving landscape of UK tourism, holiday let properties in popular destinations are seeing a significant surge in profits. According to the latest Staycation Index report by Sykes Holiday Cottages, Brixham in Devon stands out as the leading destination for holiday let investment, with bookings increasing by an impressive 62% year-on-year.
Cornwall remains a top-performing region, with Camborne identified as the best place to buy a holiday home within the county due to strong booking performance. Other popular and profitable locations include seaside towns and coastal regions like parts of Devon, Anglesey in Wales, Northumberland, and Weston-super-Mare in North Somerset. However, these areas may experience seasonal fluctuations, as seen in Cornwall and Northumberland.
The overall trend shows a strong staycation market, with two-thirds of Brits planning to take a UK break this year. Families are expected to spend £1,292 on holiday, a 17% increase from last year. Notably, solo staycations surged by 28% in 2024, with Whitby, Keswick, and Ambleside being the most popular destinations.
The appeal of UK staycations is not only supporting local economies but also helping many owners navigate this shifting landscape. Teignmouth in Devon and Saundersfoot in Pembrokeshire have seen booking growth of just over 30%.
While the running costs for a holiday rental may be higher, the net rental yield and income for a holiday rental can be double that of a traditional buy-to-let strategy. For instance, a holiday let property costing £200,000 with 70% occupancy could generate an annual income of £27,000, compared to £12,000 for a long-term let property rented at £1,000 per month.
The furnished holiday lettings tax scheme has ended, but the rental yield for a holiday let is still 13.5%, compared to 6% for a long-term let. Stamp duty and council tax premiums have increased for second homeowners, which is a factor to consider when investing in a holiday let property.
Robert Jones, an industry expert, affirms that holiday let investments generally earn much higher rents and yields than long-term buy-to-lets. James Shaw, managing director at Sykes Holiday Cottages, states that the continued growth in domestic bookings, particularly in trending locations, presents a valuable opportunity to offset challenges with strong demand and healthy returns.
The UK economy is projected to be boosted by £24 billion this summer due to domestic tourism, underscoring the importance of this thriving staycation market. The report is compiled using bookings data from 22,500 properties in the UK, providing a comprehensive overview of the current trends and future prospects in the holiday let market.
- To invest in personal finance, one might consider the promising holiday let market, particularly in destinations like Brixham in Devon, as highlighted by the latest newsletter from Sykes Holiday Cottages.
- For those interested in real-estate investing, regions such as Cornwall and Camborne, with a robust booking performance, could provide profitable opportunities in the lifestyle sector.
- As families prepare for travel this year, popular Staycation destinations like Whitby, Keswick, and Ambleside are expected to attract a 17% increase in spending, according to the Staycation Index report.
- Property investors considering a holiday let may find it beneficial to consider locations that have seen significant booking growth, such as Teignmouth in Devon and Saundersfoot in Pembrokeshire, as these may offer higher returns compared to traditional buy-to-let strategies.
