"It's no longer just about peak summer demand; the highest-earning areas are those that can attract visitors year-round"
- James Shaw - Sykes Holiday Cottages
Grasmere in the Lake District is generating £45,900 a year for holiday let owners, nearly £20,000 above the UK average, as new data identifies the country's most lucrative locations for 2026.
Analysis by short-term rental platform Sykes Holiday Cottages shows that countryside and year-round destinations are now outperforming traditional seaside locations, as traveller demand shifts towards more flexible, off-peak UK breaks.
The findings come from the firm's latest report, which draws on bookings and revenue data from more than 25,000 UK holiday rentals.
Grasmere tops the rankings for the second consecutive year. Average income there reached £45,900 in 2025, up from £43,200 in 2024 and well ahead of the UK average of £25,600. Castleton in the Peak District recorded one of the biggest climbs, rising from eighth place in 2024 to second in 2025 with average earnings of £38,200, reflecting a growing appetite for year-round countryside breaks. Other strong performers include Bowness-on-Windermere (£36,200) and Ambleside (£34,800).
What these locations have in common
The report identifies several characteristics shared by the UK's highest-earning holiday let investment locations: year-round appeal, strong tourism infrastructure, and proximity to natural or cultural attractions.
Matlock and Castleton, both gateways to the Peak District, attract walkers and families throughout the year, supporting consistently high occupancy rates. Coastal destinations such as Aldeburgh and Hunstanton are also seeing renewed demand, particularly among families seeking seaside breaks with broad seasonal appeal.
Historic cities, including Durham and Chester, are proving equally resilient, drawing visitors through a combination of heritage, retail and dining across multiple short-break audiences.
Year-round occupancy lifting returns
A key driver behind rising earnings is the shift towards bookings outside peak season. Sykes' data shows that locations with strong all-season appeal are delivering the most consistent returns, and owners who adapt their offering stand to benefit further.
Accepting short breaks and multiple bookings per week generates 25% more revenue on average. Pet-friendly properties secure 16% more income, and homes with hot tubs can earn up to 40% more annually. Demand for UK breaks more broadly remains strong, with 2025 marking Sykes' biggest year on record for bookings and early 2026 bookings already tracking ahead year-on-year.
Owner confidence holds firm
Despite ongoing regulatory changes and cost pressures, the holiday let investment market continues to show resilience. Some 83% of owners say they are confident in the future profitability of their investment, and 60% expect demand to grow over the next 12 months.
"What we're seeing now is a clear shift in what makes a holiday let successful," said James Shaw, chief commercial officer at Sykes Holiday Cottages. "It's no longer just about peak summer demand; the highest-earning areas are those that can attract visitors year-round."
"Countryside and heritage destinations in particular are outperforming because they appeal to a wider range of travellers, from weekend breaks to longer off-season stays. For owners, that means focusing less on traditional hotspots and more on places that can deliver consistent occupancy across the calendar."
"As the market continues to evolve, owners who can drive year-round occupancy, whether by attracting short breaks, catering to pet owners or investing in features like hot tubs, are best placed to maximise returns."
