Location is everything if you’re considering investing in a holiday let property. Fortunately, the United Kingdom offers plenty of options, from rugged coastlines to rolling countryside. In fact, you’re spoilt for choice. And for that reason, we’ve put this guide together, exploring some of the best locations for holiday lets in the UK.
What makes a good holiday let location?
The holiday let and short-term lets business is booming. According to data from the Office of National Statistics, more than one in ten addresses are used as holiday homes in England and Wales. Some of those will be occupied by the owners at points throughout the year, but others solely let these properties out as holiday lets.
It’s important to understand what makes a good holiday location before investing. The season plays a central role, with properties along the coast far more likely to be in demand during the warmer months. On the other hand, country retreats might benefit from year-round demand.
However, those coastal locations tend to achieve some of the highest rents when the season is in full flow. Cities are also in demand, whether it’s people visiting for business or as tourists to see historical landmarks. London, for example, has the highest number of Airbnb listings in the whole of the UK.
Essentially, a good holiday let location in the UK is somewhere people want to visit frequently, whether it’s for the beaches, culture or entertainment.
How we chose the best holiday let areas
At Molo, we have access to average house price and long-term let potential data (in other words, yields) for areas across England and Wales. We’ve combined this information with the average nightly and monthly holiday let prices from other sources to find out the holiday let areas with the best yields.
These are the five locations that make for the best holiday let options
1)
Durham
Durham is a county steeped in history, natural beauty and academic excellence. The city of Durham itself is a jewel in the crown, home to the iconic Durham Cathedral and Castle, both UNESCO World Heritage Sites. The cathedral is not just an architectural marvel but also a place of deep historical and religious significance. Durham University is also known as one of the oldest and most prestigious universities in the UK.
Beyond the city, the county offers a range of charming locations like Barnard Castle, known for its historic market and namesake castle, and Bishop Auckland, famous for Auckland Castle and its connection to the Prince Bishops. The county also boasts natural wonders like the Durham Dales and the High Force Waterfall, making it a haven for outdoor enthusiasts.
For holiday lets, the city centre of Durham is a prime location, especially for those interested in history and academia. Other areas like Chester-le-Street and Seaham offer a mix of coastal and countryside settings, ideal for those looking for a more relaxed pace.
The average property price in Durham is £94,055, making it a more affordable option compared to many other UK counties. For short-term lets, you can expect to earn around £185 per night for a two-bed property. If you’re considering a long-term let, the average monthly rent is approximately £545.
Locations with highest rental yield
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2)
Nottingham
Nottingham is a city that effortlessly blends the old with the new, offering a rich tapestry of history, culture, and modernity. One of its most iconic landmarks is Nottingham Castle, a site steeped in history and legend, including the tales of Robin Hood. The city is also home to Wollaton Hall, an Elizabethan mansion set in a sprawling deer park, offering a tranquil escape right in the heart of the city.
When it comes to holiday lets, the Lace Market and West Bridgford are top contenders. The Lace Market is a historic quarter known for its impressive 19th-century red-brick architecture and vibrant nightlife. West Bridgford offers a more suburban feel with excellent parks and amenities.
The average property price in Nottingham is £180,534, making it a more affordable option compared to many other UK cities. For short-term lets, you can expect to earn around £120 per night for a two-bedroom property. If you’re considering a long-term let, the average monthly rent is approximately £1,000.
3)
Southend-on-Sea
Southend-on-Sea is a seaside resort town that offers a delightful mix of coastal charm and entertainment. One of its most famous attractions is the Southend Pier, the longest pleasure pier in the world. It stretches 1.34 miles into the Thames Estuary and is more than just a walkway – it’s a symbol of Southend’s enduring appeal as a holiday destination.
When it comes to areas ideal for holiday lets, Leigh-on-Sea, Westcliff-on-Sea, and Thorpe Bay are particularly noteworthy. Leigh-on-Sea is a quaint, historic area known for its fishing community and artsy vibe. Westcliff-on-Sea is popular for its gardens, theatres, and proximity to the beach, making it a hit with families. Thorpe Bay, on the other hand, offers a more upscale experience with its grand houses and yacht club.
The average property price in Southend-on-Sea is £235,057, which is relatively moderate given its proximity to London. For short-term holiday lets, you could expect to earn around £125 per night for a two-bedroom home. If you’re considering a long-term let, the average monthly rent hovers around £999 per month.
4)
Isle of Wight
The Isle of Wight is a captivating island off the south coast of England, known for its stunning beaches, scenic landscapes and rich maritime history. One of its most iconic landmarks is the Needles, a row of three chalk stacks that rise dramatically from the sea, offering a breathtaking view that’s a must-see for any visitor.
When it comes to areas ideal for holiday lets, Cowes, Ventnor, and Shanklin stand out. Cowes is famous for its annual sailing regatta and offers a lively atmosphere with its range of shops, bars, and restaurants. Ventnor, with its unique microclimate, is a haven for those interested in botany and offers a more laid-back vibe. Shanklin is known for its sandy beaches and the charming Shanklin Chine, a wooded coastal ravine that’s one of the island’s oldest attractions.
The average property price on the Isle of Wight is £229,490. For short-term holiday lets, you could expect to earn around £120 per night for a two-bedroom home. If you’re considering a long-term let, the average monthly rent is £830.
5)
Cambridgeshire
Cambridgeshire is a county offering a rich blend of academic prestige, rural beauty and historical significance. At its heart lies Cambridge, a city globally renowned for its university, which dates back to 1209. The city is a hub of intellectual and architectural grandeur, with the university’s colleges boasting some of the most iconic buildings in the country, such as King’s College Chapel and the Bridge of Sighs.
Beyond Cambridge, the county offers other charming areas like Ely, known for its magnificent cathedral, and Huntingdon, the birthplace of Oliver Cromwell. These areas provide a quieter, more rural setting compared to the bustling academic environment of Cambridge.
For holiday lets, Cambridge itself is always in high demand, particularly around the university and the historic city centre. Ely and St. Ives are also popular choices, offering scenic beauty and a slower pace of life. These areas are ideal for those looking to explore the Fens or take boating trips on the River Great Ouse.
The average property price in Cambridgeshire is £364,336, with Cambridge being on the higher end due to its global appeal. Short-term lets in the city can fetch around £165 per night for a two-bedroom property. For long-term rentals, the average monthly rent is approximately £1,250, varying between urban and rural locations.
Holiday let properties and their rental yields
Below is a breakdown of the areas featured in this guide, including their rental income potential and rental yield for both short-term holiday lets and long-term lettings. For more information regarding rental yields across England and Wales, check out Molo rental yield calculator.
Locations | Property price | Short term nightly income | Rental yield | Long term monthly income | Rental yield |
Durham | £94,055 | £ 185 | 71% | £ 545 | 6.67% |
Nottingham | £180,534 | £120 | 24% | £1,000 | 6.45% |
Southend on Sea | £235,057 | £125 | 19% | £999 | 4.93% |
Isle of Wight | £229,490 | £120 | 19% | £830 | 4.21% |
Cambridgeshire | £364,336 | £165 | 16.4% | £ 1,250 | 3.99% |
Calculations for rental yield are typically based on the premise that a property will be fully occupied for an entire year. While this assumption may not hold true for most holiday lets, we’ve opted to use the same conventional methodology to determine the rental yield for areas popular for holiday accommodations.
Locations with highest rental yield
- Explore the map
- Calculate expected yield based on your property value
- Calculate the avg. monthly rent and compare results with any location on the map
List of short-term or holiday let rent costs to consider
When considering short-term rentals, there are several costs that landlords and property owners should keep in mind. Firstly, there’s the initial setup cost, which includes furnishing the property and ensuring it meets safety standards.
Marketing expenses are another factor, as platforms like Airbnb charge a service fee. Cleaning costs are often higher for short-term lets, given the frequent turnover of guests. Utilities may also be included in the rent, adding to the monthly outgoings.
Additionally, there may be local taxes or licensing fees specific to short-term rentals. Insurance premiums could be higher to cover the risks associated with transient occupancy. Lastly, maintenance costs can add up, especially if the property is in high demand, requiring regular upkeep.
Holiday let mortgages
Before jumping head first into the holiday let mortgage market, there are several key considerations you’ll need to factor in. Firstly, assess the property’s location and its potential for attracting holidaymakers. A prime location can significantly impact your rental income.
Secondly, understand that lenders often have set criteria for holiday let mortgages compared to standard buy-to-let options. At Molo, for example, we judge the property’s ability to achieve a long-term monthly rental income as a primary factor when offering a mortgage.
It’s also important to consider the seasonality of the holiday let market. Unlike traditional rentals, income may not be consistent year-round, which could affect your ability to meet mortgage repayments. You need to ensure you can cover the monthly payments.
Finding a holiday let mortgage needn’t be stressful, and specialist lenders like Molo can help you find the right option for your holiday let investment. Learn more about holiday let mortgages and the products on offer from Molo
Final thoughts: holiday lets
The UK is a playground of areas high in demand for short-term holiday lets, which means investors have plenty of choices. The areas on our list are either established hotspots or up-and-coming areas ready to thrive. The best news is that holiday lets are popular right now, and if you’re thinking about investing in one, Molo can help with specialised holiday let mortgages.
Find out more about Molo’s holiday let mortgages
Locations with highest rental yield
- Explore the map
- Calculate expected yield based on your property value
- Calculate the avg. monthly rent and compare results with any location on the map
