Nearly half of holiday let owners say their profits have risen since the abolition of furnished holiday let (FHL) tax advantages, according to research from Cumberland Building Society.
The lender's inaugural Holiday Let Index, coordinated by Pegasus Insight through a quantitative online survey of 125 respondents, found that 48% of owners reported higher profitability since the tax changes took effect. A further 19% said profits had remained broadly unchanged.
Cumberland's research shows how owners have adapted their approach following the removal of the previous FHL tax regime. Some 47% have increased nightly rental rates and 46% are focusing on improving occupancy. The survey was carried out in May 2026 and covered 25 mortgage brokers, 50 private landlords and 50 homeowners from across the UK.
Guest behaviour has also shifted alongside those owner adjustments. Half of respondents reported more last-minute bookings, while 39% have seen shorter stays and the same proportion have noticed greater price sensitivity among guests.
On yields, 86% of owners surveyed are achieving gross rental yields of 5% or more. Cumberland's index found that 44% reported yields between 5% and 6%, 34% between 7% and 8%, and a further 8% between 9% and 10%.
Sentiment about the near term remains largely positive. Some 61% of owners said they are optimistic about future yields, while 30% intend to purchase another holiday let within the next 12 months and 25% plan to expand their portfolio.
For the purposes of the research, holiday let owners were defined as private landlords with at least one mortgaged holiday let, or homeowners who own their primary residence alongside at least one mortgaged holiday let.
"What I take from these findings is that resilience in the holiday let market is not passive," said Grant Seaton, head of intermediary lending at Cumberland Building Society (pictured).
"Owners are having to work for their returns. They are looking much more closely at pricing, occupancy, finance costs and how each property is run, rather than assuming demand alone will produce a good result.
"That is an important distinction because a strong gross yield does not automatically mean a strong business. Two properties producing the same rental yield can have very different outcomes once seasonality, management fees, maintenance, borrowing costs and periods without bookings are taken into account.
"The owners who perform well over the longer term are therefore likely to be those who understand the numbers behind their property and are prepared to adjust when conditions change. For brokers, that makes the conversation much broader than simply asking what rent a property might achieve. It means understanding how sustainable that income is, what costs sit behind it and whether the borrower has enough room in their plans for periods when performance is weaker."
