"Staycations have been growing in popularity over the past decade and right now demand for our UK holiday cottages is higher than ever, with the average annual income of a holiday let owner up as a result"
- Graham Donoghue - Sykes Holiday Cottages
The Cotswolds has topped a new ranking of the best places in the UK to own a holiday let, according to a new report from Sykes Holiday Cottages.
With annual incomes averaging £28,500, versus a UK average of £24,500, the region has taken the top spot away from Cumbria and the Lake District (£28,200) which has dropped into second place.
Dorset (£27,000) and Cornwall (£26,500) follow closely behind in the new ranking, while other common UK holiday hotspots like the Peak District (£26,500) and the Scottish Highlands and surrounding islands (£25,100) also feature in the top ten.
Meanwhile, Northumberland (£25,000) and East Anglia (£24,900) are two new contenders to feature in the annual top ten ranking by Sykes, with these regions going from 19th and 18th position to 7th and 8th, respectively, this year.
The Holiday Letting Outlook Report 2024 analyses Sykes Holiday Cottages’ revenue data and booking figures to drill into the income potential of holiday letting in the UK. This is alongside a survey of holiday let owners to review their opinions on recent regulatory and tax changes and expert-led commentary on the future of the sector.
According to a poll of 500 UK holiday homeowners commissioned for the report, 65% are worried about the recent changes introduced to the sector, with increased taxes causing the most concern.
However, despite this concern, the majority (86%) of holiday let owners have not ever considered exiting the market, with half of owners even contemplating buying another holiday let in the future regardless of the changes.
Separate research from the Professional Association of Self-Caterers also found that the potential removal of the furnished holiday let tax regime may not actually impact the majority of holiday let owners, with an estimated 57% of holiday let owners not having a mortgage on their property and therefore less likely to be impacted.
According to calculations by Sykes’ specialist tax advisory partner, Zeal, those that are impacted by this latest change – which isn’t planned until April 2025 – could lose an average of £1,890 a year in tax, based on an average mortgage balance in the UK of £189,000, and assuming they are a higher rate taxpayer.
Sykes’ research also found that 81% of holiday let owners say residents local to their holiday lets welcome tourism and somewhat rely on it, with nearly all (96%) stating that it is unlikely a local person would even purchase their let if they did ever sell it.
Holiday let owners also have reason to remain optimistic as the demand for staycations is still growing, with bookings for Sykes’ holiday lets over the recent Easter school holidays up 11% compared with last year.
Graham Donoghue, CEO, Sykes Holiday Cottages, said: “Staycations have been growing in popularity over the past decade and right now demand for our UK holiday cottages is higher than ever, with the average annual income of a holiday let owner up as a result.
“But of course, the past twelve months have been slightly different for the industry, and our latest report therefore also reflects how holiday let owners are feeling in light of the recent changes.
“Despite changes, it is clear that holiday letting remains a profitable and rewarding long-term business model, with the nation’s love of holidaying at home and exploring our incredible country going nowhere. The Cotswolds, in particular, has had a positive year, claiming the top spot for earnings across the UK.
“At Sykes, we’re passionate about holiday letting and the benefits it brings to local economies across the country by driving spending, providing direct employment, and supporting independent businesses. We will continue to guide owners through their short-term let journeys, helping them to run successful holiday homes, no matter what.”
