A holiday let in the right spot could generate an annual income of up to £28k. Lisa Hodgson reveals all the ingredients you’ll need to make your holiday property a roaring success
Thinking about investing in a holiday let? You’re not alone. With UK holidays booming and demand for short breaks continuing to rise, more and more people are considering holiday lets as a smart way to generate income and build long-term wealth.
With so many listings around, it helps to make yours stand out. That often comes down to three key areas: location, the property and the lender. With the right support and a clear investment plan, a single property could become a strong-performing asset, or even the start of a growing portfolio.
1. Location, location, location
Buying in the right area is everything when it comes to holiday lets. According to the latest March Sykes Holiday Letting Outlook Report, top-performing areas like the Lake District, Cotswolds, and Yorkshire Dales regularly generate annual incomes of £24,000 or more – with hotspots like Cumbria pushing beyond £28,000.
The Peak District has held its crown as the UK’s best-performing region for six months running, while North Wales and the Cotswolds remain firm favourites. If you’re just starting out, look for locations with strong year-round appeal. Think national parks, coastlines or places packed with family-friendly attractions.
2. Simple upgrades can mean better returns
Buying the right property is just the start. Investing in a thoughtful refurbishment can boost your rental income and attract more bookings. Guests love features like hot tubs, log burners, modern kitchens and pet-friendly policies. In fact, Sykes found that properties welcoming dogs earn 7% more on average and generate nearly 10% more bookings than those that don’t.
Small changes can make a big difference. Think about adding extra parking, upgrading the interiors or making the space more energy-efficient. These touches can justify higher nightly rates and improve occupancy all year round.
If you’re working with The Cumberland, we can consider lending for non-structural improvements – helping you unlock even more value from your investment.
3. Timing is everything
Easter is one of the busiest periods for holiday lets, with Sykes reporting a 77% surge in bookings in March alone. That’s why it’s worth making sure your property is ready in time for key dates in the calendar – from school holidays to bank holiday weekends.
Many bookings are made last minute, so flexibility is key. Short mid-week stays are in demand and allowing pets or offering special deals for repeat guests can help keep your calendar full.
4. Holiday let mortgages – speak to an adviser
Financing your holiday let is very different from buying a main home. Holiday let mortgages are usually based on the income the property can generate, rather than your personal salary alone. That’s why it pays to speak to a specialist mortgage adviser who understands the holiday let market inside out.
These experts can help you find the right lender and product, whether you’re buying your first property or remortgaging to release equity. Some lenders cap the number of properties you can own, but at The Cumberland, we are willing to lend on up to 20 properties, giving more choice to investors who want to scale up over time.
5. Choose lending that understands how holiday lets really work
Choosing a lender who understands the unique challenges of holiday letting is essential. The Cumberland offers remortgage products, flexible lending for refurbishments and support for individual buyers or limited companies.
Holiday letting can be rewarding, but it’s also a business. Recent changes to income tax relief, council tax classifications and the introduction of licensing schemes in parts of the UK have added extra layers of complexity.
That’s why it’s vital to speak to a qualified accountant or financial adviser who understands the holiday let market. They can help you build a sustainable investment model, stay compliant and protect your profits.
6. The value of a letting agent
Holiday letting agencies can also be a valuable partner. They know what guests are looking for and can guide you on pricing, promotion and property presentation. They can also advise on small improvements – like better driveways in rural areas or allowing short stays – that could significantly boost your income.
Despite recent changes, the future looks bright for UK holiday lets. Domestic tourism is strong, and with fewer high-quality short-term rentals available, well-presented properties in great locations are in high demand.
With the right plan, expert advice and a lender who understands the market, your holiday let can deliver strong returns and support a long-term investment strategy.
Lisa Hodgson is senior sales manager at The Cumberland Building Society
