Holiday and vacation rental statistics

A holiday home may be a second property that you do not use as your main residence but use for family trips, let friends or family stay at, or rent out to paying guests.

In order to qualify as a holiday let on which you can receive tax benefits, the UK government requires that the property be fully furnished and available to let for 210 days each year and let for at least 105 days. This means that you can still retain the holiday let for personal use for up to 22 weeks a year.

Top short-term rental statistics and trends

• In June 2024, nearly all (10 out of 11) regions of Great Britain saw growth in the supply of short-term rental properties from five years earlier (June 2019), at an average rate of +51%

• Only Scotland underwent a drop in the supply of holiday and vacation rentals, falling -5% from June 2019

• Short-term rental properties in Edinburgh, London, and Manchester had the most nights reserved in June 2024

• Occupancy rates across Britain remain down year-on-year and are not yet forecasted to trend towards 2019 levels

• Total nights reserved across short-term rentals in the UK was up 98% in January 2024 from January 2019.

How many holiday and vacation rental properties are there in the UK?

While there is no single, definitive source to answer this question, a House of Commons Library report claims a “plausible” estimate for the number of short-term lettings in England is 257,000. However, the House of Commons considers this to be an underestimate of the actual figure. 

This is backed by Generation Rent, which claims that, as of 2022, there were nearly 300,000 holiday homes in Great Britain, accounting for around 6% of the private rental market. 

According to data from the government’s 2021-22 English Housing Survey (published in December 2023), nearly half (45%) of English residents who own a second home stated they have this property as a “holiday home”. 

A breakdown of the most common reasons for owning a second home

Over a third of Brits who own a second home state this is for a long-term investment. Typically, this indicates a landlord’s intent to rent the property for a number of years, either as a holiday let or to tenants, before occupying the property post-retirement.

Interested in investing in a property? Compare buy-to-let mortgages.

How many Brits own holiday and vacation properties abroad?

Over the last decade, the number of second homes located in the UK has increased. Furthermore, the proportion of holiday homes owned by Brits in the UK and abroad has changed since the Brexit decision in 2020. 

Most recent data from the Government’s English Housing Survey shows that 60% (482,000) of second homes were located in the UK, with the remaining 40% abroad (327,000). By comparison, in 2010-11 and pre-Brexit, there were more homes outside the UK (371,000 or 52%) than in the UK (48%). 

Outside of the UK, 30% of second homes were located in Europe (versus 38% a decade earlier), and 11% were in non-European countries (versus 14% a decade earlier).

A breakdown of the location of second homes and how this has changed in 10 years

Statistics on holiday rental income

According to Sykes Cottages, the average gross annual income for a holiday let in the UK ranges between around £16,000 and £58,000, depending on the number of bedrooms. A one-bedroom property can generate a healthy revenue of £16,300 and jumps by £41,300 for properties with five or more bedrooms. 

A breakdown of the average gross income for holiday lets based on the number of bedrooms

Naturally, certain areas across the UK offer greater earning potential, with holiday lets in the Cotswolds topping the list. Properties in this area typically earn £24,700 for a two-bedroom and £46,300 for a four-bedroom. Cumbria and the Lake District are the next most profitable, earning £21,300 for a two-bed and just over double for a four-bed at £44,200. 

Other holiday let hotspots include Cornwall, the Highlands and the Islands, and North Wales. 

A breakdown of the top 10 highest earning areas to own a holiday let

How do holiday let mortgages work?

Though colloquially referred to as holiday let mortgages, the mortgage required for purchasing a property for this use is a second home mortgage. 

These also differ from buy-to-let mortgages as those for holiday homes typically allow for seasonal rentals and, therefore, longer periods of vacancy than buy-to-let properties, and single lets are only allowed for a maximum of 31 days.

As holiday lets operate seasonally, they have the potential to earn more money during the high season than a typical rental property due to much higher rates. However, as occupancy fluctuates throughout the year, lenders may be more cautious when calculating loans.

Typical criteria for a second home mortgage for holiday let purposes include:

• Applicant should already be a homeowner

• A minimum of 25%-30% deposit, as the maximum LTV is typically 70-75%

• Lenders look for applicants with proposed properties which can generate a rental income equal to 125-145% of the monthly repayments

• Many lenders place a cap on the number of days per year applicants are able to stay at the property themselves

• Lenders typically request that the property be in an area with high tourist demand, desirably decorated and marketed, and not a mobile home or caravan

• Some lenders require applicants to have specialist holiday let insurance in place to cover the cost of cancelled bookings and other lost income.

Interested in a mortgage to fund the purchase of a holiday home? Read our full guide on mortgages for holiday lets.

Holiday let mortgage restrictions

Due to the recent boom in short-term lets, new controls on holiday lets in England will be introduced in summer 2024. This means people may need to seek permission from the council to turn their homes into short-term lets, and a mandatory national registration scheme will also be introduced.

The Government Department for Levelling Up, Housing and Communities said councils would have the power to require planning permission for properties to be turned into short-term lets, if they deemed this necessary.

Only new short-term lets require planning permission; existing lets will automatically be reclassified. The rules will not apply to people renting their main home for less than 90 nights a year, and hotels, hostels, and B&Bs will also be unaffected by the changes.

The government claims that the changes would make it easier to find affordable housing in areas with a high number of short-term lets.

Scotland introduced controls on holiday lets in October 2022, requiring all new hosts to obtain short-term let licences from their local councils. Short-term let control areas have also been set up, which give councils the power to designate areas to manage high concentrations of short-term lets. Currently these areas exist in Edinburgh (designated in September 2022), and Badenoch and Strathspey Ward in the Highlands (designated in March 2024).

Further to this, in February 2024, Leeds Building Society (LBS) announced a 12-month trial ban on offering new holiday let mortgages in tourist hotspots, starting from  28 March 2024 and targeting North Norfolk and areas of North Yorkshire.

This trial has been set out in a bid to help aspiring homeowners who, according to some local residents, are being boxed out of their communities by second-home owners. LBS stated that they worked with local councils to identify areas where local housing needs were greatest, and to balance local residents' interests with the economic benefits of holiday let tourism.

What insurance do I need for my holiday rental property?

While you aren’t required by law to have a holiday let policy, it may be a requirement in order to receive a holiday let mortgage.

As well as standard buildings and content terms, holiday let insurance also typically covers:

• Costs of alternative accommodations, if your property becomes damaged and you need to make other arrangements for your guests

• Loss of income, if you need to cancel a booking as a result of damage caused by fires or flooding

• Public liability insurance, including any legal fees or compensation fees, should a guest be injured on your property

• Employers’ liability insurance, if you employ anyone, such as a cleaner, to look after the property, and they become hurt as a result of their work.

• Compared to standard home insurance, holiday let insurance typically covers you if the property has been empty for over 30 days.

If you’re a landlord in the UK – or are thinking about becoming on – head to our landlord hub for advice, guidance and resources.