Profits up for holiday let investors despite falling demand

A relaxing of travel restrictions and an escalating cost-of-living crisis was always going to test the strength of the UK's staycation market. Yet, despite these factors, holiday home owners earnt a record-breaking £28,000 on average in 2022, a 33% increase on income levels seen pre-pandemic.

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Property Reporter
12th January 2023
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According to the new data from Sykes Holiday Cottages, holiday let owners are continuing to see success with their properties despite claims that demand for staycations is slowing, with bookings to UK short-term lets up by 33% last year compared to 2021.

Cumbria & the Lake District was the top earning region for holiday homeowners in 2022, while the Peak District came in second and Cornwall and Devon jointly rounded out the top three.

On average, holiday let owners in Cumbria & the Lake District can expect to earn £36,000 per year for a four-bedroom house – 29% more than the average income of a UK holiday let in 2022, and 29% up on the Cumbria average in 2019.

In the Peak District, owners can earn £33,000 per year on average for a four-bedroom house, while in Cornwall and Devon, they can earn £32,000.

Meanwhile, growing cost pressures and the potential for regulatory changes to the sector failed to put new holiday homeowners off entering the market in 2022, with Sykes welcoming 14% more new owners compared to 2021.

North Wales, Cornwall, and Cumbria & the Lake District were the top three most popular regions for new holiday homeowners last year, with those investing in the holiday letting market prioritising coastal properties or those with nearby rambling and cycling trails.

Sykes’ latest analysis also reviewed the property amenities topping guests’ wishlists in 2022. Hot tubs, Wi-Fi, and gardens were among the top three most-searched features on the holiday let agency’s website.

Bev Dumbleton, chief operating officer at Sykes Holiday Cottages, said: “Staycations arguably offer a more affordable alternative for holidaymakers across the UK and, combined with the fact that many Brits rediscovered their love for holidaying closer to home during the pandemic, it appears demand is going nowhere.

“We’re still seeing a significant number of new holiday homeowners join us despite the rising cost of living, and positively for owners, bookings and income levels are continuing to grow. The government’s impending review into the sector can’t be ignored, but this also doesn't appear to be phasing owners just yet, with any immediate changes for the sector being quite unlikely amid other priorities in government.

“Those looking to try holiday letting should weigh up their options and due diligence regarding the location first and foremost. Coastal locations like Cornwall and Devon or stunning regions like the Lakes always prove particularly fruitful for owners, but the long-term investment opportunity in up-and-coming hotspots like the Yorkshire Dales and East Anglia are also worth keeping an eye on.”

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