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Following a boom in staycations and UK holidays, now could be a good time to invest in a holiday let property.
But where are the best locations for holiday let landlords and what do you need to consider?
Dorset in the South West, the Peak District in the North West, and Northumberland in the North East are the top three holiday let investment locations, according to Sykes Holiday Cottages.
Perhaps surprisingly there’s no place for Cornwall in the top 10, despite it being one of the UK’s best-known areas for holiday lets.
Although Cornwall remains popular with holiday goers, landlords may not be able to get a good return on investment due to higher property prices.
The rest of the top 10 includes coastal and countryside locations from across the UK, including Scotland and Wales.
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.
Max avg potential annual return
Yorkshire and the Humberside
7. North Wales
Yorkshire and the Humberside
10. South Coast
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.
According to Sykes Holiday Cottages, three of the best areas for holiday let landlords to invest in Dorset are:
The average sold price for a property in Dorset in the last 12 months is £422,999, according to Zoopla. Semi-detached properties sell for an average price of around £370,000, while terraced homes and flats typically sell for between £255,000 and £315,000.
Returns for holiday let landlords investing in Dorset can be high. The average weekly rent for a two-bedroom property is around £300, rising to around £375 for a three-bedroom property, according to Home.co.uk.
For the most exclusive holiday homes, landlords can earn upwards of £575 a week.
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:
Three of the best Peak District locations for investors, according to Sykes Holiday Cottages, are:
The average cost of a property in the Peak District is around £340,000, according to Zoopla. The top end for detached properties is closer to £550,000, down to just under £180,000 for flats.
Holiday let landlords who invest in the Peak District can earn up to £560 a week for larger, more exclusive properties. Meanwhile, according to Home.co.uk, one and two-bedroom rental properties in Bakewell are commonly listed for between £250 and £350 a week.
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.
Some of the most popular locations for holiday home investors include Whitley Bay to the south, Eslington Park in the centre, and Tweedmouth to the north.
Landlords looking for holiday homes could get a good return on investment in Northumberland, with an average sold price of £238,989, according to Zoopla. Detached homes are more 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 £170 and £210. However, holiday homes at the top end of the market could generate upwards of £550 in rental income each week.
Another National Park, the Yorkshire Dales is popular with walkers and countryside enthusiasts.
Its best-known dales include:
When it comes to buying a holiday home in the Yorkshire Dales, Sykes recommends the following three locations:
The average sold price in this region is just under £350,000, according to Zoopla. Buyers of terraced properties could expect to pay in the region of £260,000, while semi-detached homes commonly sell for around £325,000.
Two and three-bedroom rentals in Ripon can generate up to £400 a week in rental income, while exclusive holiday homes across the area can fetch over £500 a week.
A county in the South West, Somerset is home to the Mendip and Quantock Hills as well as Exmoor National Park.
Somerset is popular with UK holidaymakers for its views and extensive countryside, as well as coastal hotspots Weston-super-Mare, Portishead, and Clevedon.
Street and Taunton are popular locations to explore the Somerset countryside, while Burnham-on-Sea is one of the area’s best-known seaside towns.
The average property in Somerset sells for around £340,000, according to Zoopla. Detached properties typically sell for around £500,000, while flats and apartments can be bought for around £150,000.
Landlords rent out holiday homes for over £500 a week, with prices dropping to between £220 and £295 a week for one and two-bedroom properties.
The average rental and house prices used in this article are based on 2023 data, and it's important to note that the amount you can charge for renting out a holiday home varies throughout the year.
Devon is popular for its mix of market towns, cities, National Parks, and picturesque coastline.
Alongside neighbouring Cornwall, it’s arguably one of the UK’s most popular holiday locations.
Sykes picks out the following three locations as the best spots to buy a holiday home in Devon:
The average Devon property costs around £350,000, according to Zoopla data.
Detached homes typically sell for well over £525,000, while terraced and semi-detached properties sell for between £260,000 and £320,000.
Rental prices for two and three-bedroom properties range between £260 and £350 a week, according to Home.co.uk.
However, top-end properties in Devon could see holiday let landlords earn in excess of £500 a week.
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.
Alongside Anglesey and Llandudno, Sykes names medieval town Conwy as one of the three best investment locations for holiday let landlords.
Lower average property prices in this region mean investors could generate a healthy yield.
According to Zoopla, the typical North Wales property sells for £232,993, rising to around £330,000 for detached properties.
Holiday homes at the top end of the market can be rented out for £505 a week, dropping to between £250 and £300 a week for smaller properties.
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.
According to Sykes, three of the best areas to invest in a holiday home in this area are:
Properties in the Highlands sell for an average of £230,000, Zoopla data shows. The typical price for a detached property is nearer to £300,000, 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 £500 a week. Home.co.uk suggests that the average price for a rental in this area is around £220 a week for a three-bedroom property.
Situated in North East Yorkshire, the York Moors National Park is known for its abundance of heather.
The area is also home to some popular coastal locations including Whitby, Scarborough, and Staithes.
As well as the coastal locations, Pickering, Rosedale Abbey, and Lealholm are some of the popular areas for holiday homes on the North York Moors.
Homes in this area typically sell for around £265,000. The average detached property will cost around £320,000, while investors can buy flats and apartments for approximately £210,000.
Landlords with holiday homes in the North York Moors and Coast could expect to earn just under £500 a week for high quality, in demand properties.
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.
According to Sykes, some of the best South Coast areas to invest in a holiday home are:
The average sold price in Portsmouth and Southampton is closer to £300,000, while this rises to £550,000 in Brighton, according to Zoopla.
Across the whole of the South Coast, holiday home investors can expect to earn a maximum of around £465 a week in rental income.
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’ll then need to think about whether you need a specialist holiday let mortgage, how you’re going to manage the property, what kind of tax you’ll need to pay, and what kind of insurance you'll need.
Read our holiday lets guides for more information:
Where do you think is the best UK location to invest in a holiday let? Let us know in the comments below.
Conor Shilling is a Copywriter at Simply Business with over two years’ experience in the insurance industry. A trained journalist, Conor has worked as a professional writer for 10 years. His previous experience includes writing for several leading online property trade publications. Conor specialises in the buy-to-let market, landlords, and small business finance.
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