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Holiday let market seeing ‘significant’ uplift with strong bookings and revenue

Anna Sagar
Written By:
Anna Sagar

The holiday let market remains strong despite the cost-of-living crisis and the possible Government review into the sector, with enquiries, revenue and short-term expectations rising.

The average owner reported a turnover of £24,000 in 2022, up 59% on 2019, according Sykes Holiday Cottages.

This rises to £33,000 for a three bedroom property and £57,500 for a let with five beds or more.

Bookings for UK holiday lets were up 48%  in 2022 against 2019.

It added that bookings made in the year to date were around 9% higher compared to the same period in 2022.

The report said that enquiries from new owners in 2022 nearly tripled compared to 2019 and 63% of owner enquiries last year were related to new holiday lets.

Sykes Holiday Cottages found that the average holiday let owner is 43, and the vast majority, 93%, have a full or part-time job alongside running a holiday let.

More than half of holiday home owners only started letting within the last three years and around 63% of owners planned to grow their holiday let portfolio in the next five years.

The cost of living is having an impact on the sector, with more than a quarter of holiday let owners seeing more bookings for shorter breaks.

One in five owners said they planned to take on more jobs to cut costs, such as cleaning and maintenance, and 16% said they were letting their properties out for more weeks in 2023.

Post-pandemic, half of owners said they had seen increased demand for UK holidays and over a quarter said holidaymakers were more likely to rebook properties.

Around one in five owners noted that there were more group bookings and 17% said they had seen a rise in younger groups.

The top reason for a holiday let was the ability to use it for personal use as well, 43% said it was to supplement existing income and 38% said it was an investment for future finances.

Cumbria and Lake District most profitable holiday let region

The top five earning regions included Cumbria, the Lake District and the Cotswolds at £28,000 per year.

This was followed by the Peak District at £27,500 per year, Cornwall at £27,000 per year and Dorset at £26,000 per year.

The company added that the best investment opportunities in the long-term were Cheshire, Anglesey, Lake District, Lincolnshire, Angus, Peak District, Dumfries and Galloway, Norfolk, North Yorkshire and Pembrokeshire.

It pointed to average house prices, house price growth and the average revenue of a four-bed holiday let as factors.

Average cost of running holiday let over £7,000

Sykes said that average costs of running a holiday let was around £7,400 per year, but this was dependent on property size, amenities and level of involvement.

Within that £1,450 was attributed to changeover costs, £1,520 to property maintenance, £1,430 to tax or licensing fees, £2,010 to utility and subscription bills and £990 to marketing expenses.

The report stated that to make holiday lets more cost effectives guests should be reminded to save energy, and the installation of smart meters could help save costs. Ensuring properties are well insulated, such as draught proofing, could also be helpful.

Graham Donoghue, Sykes Holiday Cottages’ CEO, said: “We’re still seeing a significant number of new holiday home owners 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 and our research would suggest that this is on holiday let owners’ radars too. However, at this stage, our view is that any immediate changes for the sector are quite unlikely amid other priorities in government. “

The Government launched a formal review on short-term lets and holiday lets last year, opening a call for evidence in June.

Around a quarter of owners are very worried about new regulations or fees being enforced, 52%  are somewhat worried and 20% aren’t worried at all.

He added: “In the meantime, our focus as a business is on continuing to demonstrate the sector’s positive impact while playing our part in supporting its sustainable growth.”