The most profitable locations in Britain for holiday lets have been revealed – and most are not near a beach.
Staycation favorite Cornwall tops the rankings, with an average nightly price of £84 for a room and £117 for a full house.
A total of 476,910 bookings were made through popular holiday letting companies in the area last summer, according to analysis of Office for National Statistics data by money website Wealth of Geeks.
Figures suggest holiday rentals in Cornwall received bookings worth £40m between the beginning of July and the end of September last year.
However, the majority of the top 10 are in central London, the research showed.
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The most profitable buy-to-let locations have been revealed, with staycation favorite Cornwall topping the rankings.
The top ten list also includes several areas of London, including Westminster in second place.
The average price of a holiday rental in Westminster is £133 per night for a room and £435 for a house.
With 304,790 holiday rental bookings, it generated revenue for the area in the heart of London’s West End of £34,441,270 during the summer period last year.
The calculations were based on bookings from Airbnb, Booking.com and Expedia Group, with data taken from the Office for National Statistics.
Meanwhile, rental prices were taken from Airbnb in 388 British cities and total revenue was calculated by multiplying the number of nights by the nightly cost of a room on Airbnb.
The revenue did not take into account any costs of running a vacation rental, such as repairs and maintenance, nor did it take into account property prices.
All the remaining places in the top ten were in London, except one on the south coast.
This was Brighton and Hove, where average nightly rental prices were £100 per room.
In total, the data suggested that the UK holiday rental market gained £739,211,390 during the summer of 2023.
Michael Dinich of Wealth of Geeks said: “Holiday rentals play a vital role in the UK tourism industry by supporting local economies, providing accommodation to enhance the visitor experience and promoting tourism to various regions of the country.
‘Tourism also helps promote awareness of lesser-known areas, helping to distribute tourism spending more evenly across the country.
“While some destinations may experience seasonal fluctuations in tourism, often in the summer months, vacation rentals attract visitation year-round, helping to sustain economies and businesses during slow seasons.”
Chancellor Jeremy Hunt announced in this year’s budget that the tax relief available for furnished holiday lets would be scrapped.
The findings show that those looking to invest in the holiday rental market should do their calculations carefully before taking the plunge and committing to a particular area.
North London estate agent Jeremy Leaf explained: ‘This data shows that it’s not just the prospect of beaches and more reliable weather that drives profitability.
‘It’s not just traditionally popular holiday destinations that produce the best returns, so it’s vital that potential homeowners do their research carefully before investing.
‘The ability to make money depends on supply and demand, not just the attributes of an area.
‘The level at which an owner can rent their property, after taking into account all expenses, is key and explains why areas such as Westminster and Camden are proving profitable, where they may lack the charm of a traditional UK holiday destination Like Cornwall. ‘
UK holiday rental market gained £739,211,390 during summer 2023, latest data shows
Fiscal repression
The data on the most profitable holiday rentals comes following the Chancellor’s crackdown on the sector.
Jeremy Hunt announced in this year’s budget that the tax relief available for furnished holiday lets would be removed to help improve the availability of long-term rentals.
The measure will come into force at the beginning of April next year and is widely seen as a way to align the tax regime for short-term rentals with that of long-term rentals.
Industry experts insisted that vacation rentals were still in demand before the changes.
Graham Donoghue, of Sykes Holiday Cottages, said: “Staycations have been growing in popularity over the last decade and right now demand for our UK holiday homes is higher than ever, bringing the average annual income of a vacation rental owner has increased as a result.
‘Hotspots such as Yorkshire, Cumbria and Cornwall continue to experience considerable demand and bookings across the UK for our holiday homes have increased by 11 per cent during the current Easter school holidays.
‘The demand we are seeing is especially good news for our vacation rental owners, who have been facing their own challenges lately. Despite the changes, which we are carefully guiding our owners through, it is clear that vacation rentals remain a profitable and rewarding business model in the long term.’
| Range | City | Nights | Average price per night (room) | Average price per night (house) | Average price per night (apartment) | Revenue by location (nights x price per night) |
|---|---|---|---|---|---|---|
| 1 | Cornwall | 476,910 | £84 | £117 | £113 | £40,060,440 |
| 2 | westminster | 304,790 | £113 | £435 | £147 | £34,441,270 |
| 3 | camden | 172,500 | £123 | £140 | £156 | £21,217,500 |
| 4 | Hackney | 101,140 | £202 | £204 | £127 | £20,430,280 |
| 5 | Kensington and Chelsea | 167,770 | £113 | £115 | £145 | £18,874,125 |
| 6 | Brighton and Hove | 134,010 | £100 | £100 | £128 | £13,401,000 |
| 7 | islington | 108,250 | £117 | £255 | £173 | £12,665,250 |
| 8 | Southwark | 104,290 | £112 | £116 | £131 | £11,680,480 |
| 9 | tower villages | 161,000 | £73 | £166 | £169 | £11,672,500 |
| 10 | Lambeth | 98,430 | £113 | £440 | £136 | £11,122,590 |
| eleven | Dorset | 121,880 | £88 | £120 | £131 | £10,725,440 |
| 12 | Hammersmith and Fulham | 92,140 | £111 | £123 | £146 | £10,227,540 |
| 13 | Gwynedd | 122,660 | £83 | £117 | £105 | £10,180,780 |
| 14 | Scarborough | 102,500 | £96 | £94 | £121 | £9,840,000 |
| fifteen | Liverpool | 127,310 | £77 | £85 | £103 | £9,802,870 |
| sixteen | Birmingham | 109,920 | £86 | £106 | £98 | £9,453,120 |
| 17 | Southern Lakes Region | 106,450 | £88 | £119 | £116 | £9,367,600 |
| 18 | Bournemouth, Christchurch and Poole | 112,040 | £78 | £117 | £120 | £8,739,120 |
| 19 | Pembrokeshire | 101,330 | £85 | £94 | £101 | £8,613,050 |
| twenty | Northumberland | 91,950 | £90 | £110 | £127 | £8,275,500 |
| twenty-one | york | 85,080 | £88 | £107 | £112 | £7,487,040 |
| 22 | Wandsworth | 77,700 | £95 | £160 | £138 | £7,381,500 |
| 23 | Bristol, city of | 81,700 | £78 | £111 | £115 | £6,372,600 |
| 24 | Cotswold | 61,650 | £102 | n/a | £100 | £6,288,300 |
| 25 | belfast | 79,660 | £76 | £117 | £124 | £6,054,160 |
| 26 | Isle of Wight | 70,000 | £84 | £128 | £112 | £5,880,000 |
| 27 | Bath and north east Somerset | 71,190 | £81 | £99 | £94 | £5,766,390 |
| 28 | north norfolk | 61,800 | £93 | £128 | £144 | £5,747,400 |
| 29 | Manchester | 100,480 | £57 | £76 | £109 | £5,727,360 |
| 30 | Southern Hams | 64,160 | £85 | £115 | £115 | £5,453,600 |
| Source: The Wealth of Geeks | ||||||
