The UK’s short-term rental sector continues to thrive – despite owners facing multiple headwinds, including the pending abolishment of the furnished holiday lettings tax regime.
Figures released by Sykes Holiday Cottages show bookings increased by 2.2% in 2024, with the average turnover per owner rising nominally to £24,700 (up from £24,500 in 2023).
The Cotswolds was the highest earning region, followed by the Highlands and Islands, Cumbria and the Lake District, Dorset, and the Peak District. In terms of average turnover, Grasmere in the Lake District took top spot with an average annual income of £43,200, followed by Bourton-on-the-Water (£40,400), and Stow-on-the-Wold (£40,000), which are both in the Cotswolds.
A new era for UK holiday let owners
Stringent policies – particularly the threat of higher rates of council tax in some areas – have forced owners to adapt their strategies accordingly. Almost 40% of owners are making their rentals available for more days during the year, while 33% have increased rates to offset rising costs. A quarter have claimed capital allowances, 22% have claimed for small business rates relief, and 21% have transferred their property to a limited company.
More than 50% of owners said they had been affected by council tax changes and new safety regulations. A third said they were affected by tax changes, while 32% said they had been forced to meet minimum stay criteria to qualify for business rates. Just under 30% of owners said they were affected by changes to planning laws.
The show must go on
Despite ongoing challenges – and the threat of new ones like energy efficiency mandates – 35% of owners are planning to renovate their property in the next five years. Almost a quarter are planning to buy another holiday let, while 23% are hoping to add eco-friendly features. More than 20% want to add income-boosting amenities to their properties, while 21% are planning to install glamping accommodation on existing land.
What guests want
According to Sykes, the most searched-for amenities are:
Pet-friendly
Hot tub
Large properties
Sea views
Swimming pool
Rentals with a hot tub earn an extra 21% on average, while pet-friendly properties achieve 9% more bookings.
Are empty homes the real villain of UK’s housing crisis?
Sykes cited figures from AirDNA and the ONS to estimate the number of holiday lets and empty homes in England. It found the number of long-term vacant homes to be almost 720,000, while the number of holiday lets is about 212,500.
Ben Edgar Spier, Head of Regulation and Policy at Sykes, said: “Unfortunately, over the last two years, small holiday let businesses have been caught up in policies aimed at reducing the number of second homes in specific parts of the country. That’s why we’re working hard to lobby the government to distinguish between holiday lets that bring tourism to the area and generate local income, and second homes that sit empty for most of the year, contributing very little. Without data on the number of holiday lets (that a registration scheme would provide) we’ve conducted our own analysis, which estimates there are just under 212,500 short-term lets across England – only 0.85% of total residential properties.”
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