Buying a holiday home – where are the best areas in the UK?

Buying a holiday home – best UK investment locations revealed

The Cotswolds in the South West, Cumbria and the Lake District in the North West, and Dorset in the South West are the top three holiday let investment locations, according to Sykes Holiday Cottages.

The rest of the top 10 includes coastal and countryside locations from across the UK, including Scotland and Wales.

Top 10 areas to buy a holiday home in the UK

The table below shows 10 of the best places to invest in a holiday let, based on data from Sykes Holiday Cottages.

The locations are ranked based on the potential annual rental return.

Location	UK region	Max avg potential annual return
1. Cotswolds	South West	£28,500
2. Cumbria and the Lake District	North West	£28,200
3. Dorset	South West	£27,000
4. Cornwall	South West	£26,500
5. Peak District	East Midlands	£26,500
6. Highlands and Islands	Scotland	£25,100
7. Northumberland	North East	£25,000
8. East Anglia	East	£24,900
9. South Coast	South East	£24,500
10. North Wales	Wales	£24,400

Buying a holiday home in the Cotswolds

An Area of Outstanding Natural Beauty, the Cotswolds is home to a host of historical towns and villages as well as some spectacular countryside. 

The Cotswolds has become a popular tourist destination thanks to its rolling hills and iconic homes, which makes it the perfect location to invest in a holiday home.

Where are the best areas in the Cotswolds for holiday lets?

Three of the Cotswolds’ best areas for holiday homes, according to Sykes Holiday Cottages, are: 

• Bourton-on-the-Water
• Chipping Norton
• Stow-on-the-Wold

How much do holiday homes in the Cotswolds cost?

Properties in the Cotswolds typically sell for around £410,00, rising to over £650,000 for detached properties and dropping around £190,000 for flats. 

Due to higher property costs in this area, rents are also higher. Owners of large holiday homes in the Cotswolds could receive up to £750 a week, while smaller properties could still fetch in the region of £500 to £600 a week.

Buying a holiday home in the Lake District

One of the most beautiful areas of the UK, the Lake District in Cumbria is unsurprisingly popular with tourists all year round. 

As well as a range of amazing lakes, the area is also home to Scafell Pike, the highest peak in England.

Where are the best areas in Cumbria and the Lake District for holiday lets?

Some of the best-known areas for holiday homes in the Lake District include:

• Windermere
• Ambleside
• Keswick

How much do holiday homes in Cumbria and the Lake District cost?

The average sold price in the Lake District is just over £290,000, according to Zoopla. Flats and terraced houses are likely to cost holiday home hunters in the region of £195,000 to £215,000, while larger detached properties cost around £440,000 on average.

If you own a large holiday home in Cumbria and the Lake District, it could fetch up to £600 a week. Meanwhile, smaller properties can be rented out for in the region of £350 to £450 a week.

Buying a holiday home in Dorset

From Bournemouth through Weymouth all the way to Lyme Regis, Dorset is a county in South West England best known for its Jurassic Coast.

As well as its picturesque coastline, Dorset is also home to large areas of countryside including the Dorset Area of Natural Beauty nature reserve.

Where are the best areas in Dorset for holiday lets?

Three popular areas with holiday let landlords in Dorset are:

• West Bexington
• Broadmayne
• Pentridge

How much do holiday homes in Dorset cost?

The average sold price for a property in Dorset in the last 12 months is £404,098, according to Zoopla. Semi-detached properties sell for an average price of around £350,000, while terraced homes and flats typically sell for between £240,000 and £310,000.

Returns for holiday let landlords investing in Dorset can be high. The average weekly rent for a two-bedroom property is around £330, rising to around £410 for a three-bedroom property, according to Home.co.uk.

For larger holiday homes, landlords can earn upwards of £600 a week.

Buying a holiday home in Cornwall

Renowned for its pristine beaches, pasties, and local dialect, Cornwall is one of the UK’s most popular tourist destinations.

Cornwall is home to some of the most beautiful towns and beaches in the country, which means property comes at a premium. However, this means rents are also high so investors can still make healthy returns.

Where are the best areas in Cornwall for holiday lets?

There’s no shortage of options, but three of the most popular Cornwall locations are:

• Padstow
• St Ives
• Falmouth

How much do properties in Cornwall cost?

Properties in Cornwall typically sell for around £350,000, Zoopla figures show. Detached and semi-detached homes are likely to cost between £300,000 and £475,000, while terraced houses and flats could cost between £225,000 and £260,000.

Due to the area’s popularity, a holiday home in Cornwall can make a solid return on investment. Large properties could fetch around £750 a week, while smaller homes are likely to rent out at approximately £500 a week.

Buying a holiday home in the Peak District

One of the UK’s best-known National Parks, the Peak District is a vast area of peaks, valleys, and countryside.

The Peak District covers over 550 square miles and branches out into five counties:

• Yorkshire
• Greater Manchester
• Derbyshire
• Staffordshire
• Cheshire

Where are the best areas in the Peak District for holiday lets?

Three of the best Peak District locations for investors, according to Sykes Holiday Cottages, are:

• Bakewell
• Ashbourne
• Matlock

How much do holiday homes in the Peak District cost?

The average cost of a property in the Peak District is around £325,000, according to Zoopla. The top end for detached properties is closer to £500,000, down to just under £180,000 for flats.

Holiday let landlords who invest in the Peak District can earn up to £600 a week for larger properties. Meanwhile, according to Home.co.uk, one and two-bedroom rental properties in Bakewell are commonly listed for between £300 and £400 a week.

Buying a holiday home in the Highlands and Islands

This area covers the Scottish Highlands and the groups of islands in Orkney, Shetland, the Inner Hebrides, and the Outer Hebrides.

This part of Scotland is known for its dramatic coastline and landscapes, as well as globally renowned tourist attractions such as Loch Ness.

Where are the best areas in the Highlands and Islands for holiday lets?

Three popular areas to invest in a holiday home in this area are:

• Inverness
• Corran
• Peinchorran

How much do properties in the Highlands and Islands cost?

Properties in the Highlands sell for an average of £230,000, Zoopla data shows. The typical price for a detached property is nearer to £310,000, while investors could pick up a flat or apartment for as little as £140,000.

Exclusive holiday homes can generate rental income in excess of £600 a week. Home.co.uk suggests that the average price for a rental in this area is around £300 a week for a three-bedroom property.

Buying a holiday home in Northumberland

Bordering Scotland, Northumberland is a popular holiday spot in the North of England with well-known attractions including Bamburgh Castle and Hadrian’s Wall.

On top of this, it has a long stretch of eye-catching coastline with beach locations such as Berwick-upon-Tweed, Alnmouth, and Blyth.

Where are the best areas in Northumberland for holiday lets?

Some of the most popular locations for holiday home investors include: 

• Whitley Bay 
• Eslington Park
• Tweedmouth

How much do holiday homes in Northumberland cost?

Landlords looking for holiday homes could get a good return on investment in Northumberland, with an average sold price of £233,000, according to Zoopla. 

Detached homes are likely to sell for more than £400,000, while terraced and semi-detached properties typically sell for between £150,000 and £200,000.
The average weekly rent for two and three-bedroom rentals in Northumberland ranges from between £250 and £300. However, holiday homes at the top end of the market could generate upwards of £600 in rental income each week.

Milosz Maslanka/stock.adobe.com

Buying a holiday home in East Anglia

A large area that covers Suffolk, Norfolk, and Cambridgeshire, East Anglia is perhaps best-known for its coastline.

As well as holiday hotspots on the coast, the region is also home to popular market towns such as St Neots, Bury St Edmunds, and Downham Market.

Where are the best areas in East Anglia for holiday lets?

Three popular holiday home locations across East Anglia include:

• Cromer
• Aldeburgh
• Wells-next-the-Sea

How much do properties in East Anglia cost?

Average properties in Norfolk, Suffolk, and Cambridgeshire sell for between £310,000 and £330,000, according to Zoopla. If you’re looking for a detached property, it’s likely to cost upwards of £450,000, while flats and terraced properties cost between £175,000 and £235,000.

Large, high-end holiday homes across East Anglia could fetch upwards of £600 a week in rent, while smaller properties could earn investors between £300 and £400 each week.

Buying a holiday home on the South Coast

Stretching from the Kent coast all the way through to Dorset, the South Coast has over 400 miles of coastline.

As well as some of the country’s best beaches, this area is also home to cities Brighton and Hove, Portsmouth, and Southampton.

Where are the best areas on the South Coast for holiday lets?

Some of the best South Coast areas to invest in a holiday home include:

• West Hougham
• Lower Swanwick
• Totland

How much do properties cost on the South Coast?

The average sold price in Portsmouth and Southampton is closer to £275,000, while this rises to £500,000 in Brighton, according to Zoopla.

Across the whole of the South Coast, holiday home investors can expect to earn an average of around £500 a week in rental income.

Buying a holiday home in North Wales

From the Isle of Anglesey and Gwynedd to Flintshire and Denbighshire, North Wales is known for its distinctive culture and rich landscapes.

Popular coastal locations include Llandudno, Colwyn Bay, and Porthmadog.

Where are the best areas in North Wales for holiday lets?

Some of the most popular holiday home locations in North Wales include:

• Betws-y-Coed
• Llandudno
• Great Orme

How much do properties in North Wales cost?

Lower average property prices in this region mean investors could generate a healthy yield.

According to Zoopla, the typical North Wales property sells for approximately £225,000, rising to around £310,000 for detached properties.

Holiday homes in Wales at the top end of the market can be rented out for around £600 a week, dropping to between £300 and £350 a week for smaller properties.

James Powell/adobe.stock.com

What do you need to consider when buying a holiday home?

Once you’ve decided on a location to invest, you’ll need to find a property that’s suitable to rent out as a holiday home.

You can then use a holiday let income calculator to give you an idea of how much you could charge in rent to make a good return on investment.

Read our holiday lets guides for more information:

• A property investor’s guide to holiday let mortgages
• Fire safety rules for holiday lets
• Do I need a holiday let agent?
• Furnished holiday let tax: a simple guide
• Holiday let insurance

Where do you think is the best UK location to invest in a holiday let? Let us know in the comments below.

Photograph: Darja/stock.adobe.com