The latest figures on Britain’s most lucrative holiday let locations are out, and it appears that the traditional seaside is not necessarily the goldmine many assume. Cornwall, famed for its picturesque beaches and tourist-friendly vibes, tops the list, but the heart of London follows closely, challenging the conventional preference for coastal retreats.
In an analysis based on data from the Office for National Statistics and curated by Wealth of Geeks, Cornwall has been identified as the champion of holiday lets. With an average nightly rate of £84 for a room and £117 for an entire house, it managed to secure a staggering £40 million in bookings from July to September of the previous year alone, out of 476,910 reservations recorded.
Surprisingly, though, the majority of the top ten most profitable locations are nestled in inner London. Westminster takes the prestigious second spot, where the cost skyrockets to £133 per night for a room and an impressive £435 for a house. This central London district earned around £34.44 million during last summer’s peak season, thanks to 304,790 bookings.
Price and Revenue Data
The findings are based on rates from Airbnb across 388 towns in the UK, with bookings from major platforms like Airbnb, Booking.com, and Expedia Group. The total revenue from the holiday rental market in Britain was a colossal £739,211,390 during the summer of 2023. This figure was reached by multiplying the number of booked nights by the nightly rental prices, not accounting for operational costs or property prices.
Exceptional Gains Outside the Capital
Aside from London’s bustling centers, Brighton and Hove stand out as the lone top-ten candidate outside the capital, drawing attention with an average nightly room rate of £100. The data highlights that while beaches are appealing, urban centers and even less traditionally popular locations can also promise substantial returns.
Economic Impact and Seasonal Trends
Michael Dinich from Wealth of Geeks remarked, “Holiday rentals play a vital role in the UK’s tourism industry by supporting local economies, providing accommodation to enhance visitor experience, and promoting tourism in diverse regions across the country. Tourism also helps to promote awareness of lesser-known areas, helping to distribute tourist spending more evenly across the country. While some destinations may experience seasonal fluctuations in tourism often in the summer months, holiday rentals attract visit year-round, helping to sustain economies and businesses during off-peak seasons.”
Tax Changes on the Horizon
The recent Budget announcement by Chancellor Jeremy Hunt that tax reliefs for furnished holiday lets will be phased out next April is set to bring significant changes. This policy aims to align the tax treatment of short-term rentals with that of longer-term ones, potentially impacting profitability.
Expert Advice
North London estate agent Jeremy Leaf emphasises that profitability in holiday lets hinges more on supply and demand dynamics than merely location attributes like beach access. He advises potential landlords to rigorously research before investing, considering factors like rental yield post-expenses. Westminster and Camden, for example, are profitable not for their traditional holiday appeal but because of their demand and rental pricing dynamics.