League table shows holiday lets income and capital appreciation

A new investment league table has been drawn up to show best aggregate rent and capital appreciation income for those in the holiday lets sector.

Blaenau Gwent in South East Wales tops the rankings according to a report from Sykes Holiday Cottages.

With house price growth currently at 12 per cent year on year, and an average holiday lets revenue potential of almost £20,000 per year, the county comes in ahead of nearby Denbighshire and Rhondda Cynon Taf, while the leading areas in England which feature on the list include Tyne & Wear and Lancashire.

The Holiday Let Outlook Report 2022 analyses Sykes Holiday Cottages’ revenue data, alongside current house prices and house price growth, to drill into the long-term investment potential of holiday letting across the UK.

Location and amenities are two of the most important factors in a holiday home’s success, so within the regions listed, any property must also be in a good location and offer desirable facilities to strengthen the investment potential.

The report also contains consumer research, Sykes’ booking figures and insights from rental data and analytics company AirDNA to paint a picture of the holiday let market.

And according to the poll of UK holiday home owners commissioned for the report, a quarter only started letting during the pandemic, with the staycation boom fuelling a rise in second home owners and investors entering the market.

Indicators suggest a continuation of the boom with bookings for Sykes’ holiday lets in 2022 up 35 per cent on pre-pandemic levels.

The consumer research found that 84 per cent of holiday let owners say bookings for 2022 are stronger than ever before, with the same number confident the trend will continue to grow over the next five years.

The report also highlights that, compared to the same period in 2021, Sykes has seen new owner enquiries from perspective holiday home investors almost double, increasing by 78 per cent in 2022. 

With a rise in holidaying at home, Sykes’ report reveals the average holiday let owner earned £28,000 in revenue from their holiday let last year, up from £21,000 in 2019. 

For those weighing up where to invest in the short-term, Cumbria and the Lake District topped the highest-earning holiday hotspots list according to Sykes’ revenue figures, with holiday lets earning an average revenue of £44,000.

Devon and Dorset follow closely behind as top-earning regions, with an average annual income of £35,000 and £32,000 respectively, while the Peak District lost its top spot, falling down to fourth place overall.

For those looking to maximise the revenue potential of their holiday lets, Sykes’ analysis found that a hot tub is the leading money-boosting feature they could have – adding an estimated 49 per cent to annual revenue.

Income figures also suggest luxury amenities such as open fires could boost earnings by 19 per cent on average, while a rise in pet ownership fuelled by the pandemic has seen pet-friendly properties now earn nine per cent more, on average.

Jamie Lane, vice president of research at short-term rental data and analytics company, AirDNA adds: “Holiday let demand for 2022 is pacing above previous years and, as shown in Sykes’ report, we expect the sector to go from recovery to expansion mode this year.

“Staying informed as the travel industry begins to normalise will allow new investors and existing homeowners to make smart decisions and add supply in the right places, evolving and adapting to changing consumer trends to offer memorable experiences in unique properties.”

To view the full Holiday Letting Outlook Report, visit: https://www.sykescottages.co.uk/letyourcottage/advice/article/holiday-letting-outlook-report