Bank of England Rate Cut Uncertainty Clouds Holiday Rental Market Profitability
The Bank of England's interest rate cut uncertainty may dampen enthusiasm for buying Airbnb-style holiday rental properties. Meanwhile, Jeremy Hunt's 2024 Spring Budget plans to scrap the furnished holiday lettings (FHL) regime, impacting tax benefits for Airbnb-style holiday let owners. Despite these factors, the Airbnb-style holiday lettings market remains attractive due to its profitability.
The Cotswolds tops the list as the most profitable Airbnb-style holiday rental location, with an average annual income of £28,500. Following closely are Cumbria and the Lake District, generating around £28,200 annually. Dorset is not far behind, with an average annual revenue of £27,000. These figures suggest that investing in Airbnb-style holiday lettings can be lucrative.
Graham Donoghue, CEO of Sykes Holiday Cottages, attributes the popularity of Airbnb-style holiday lettings to the nation's love of staycations. The 2021 census reveals that Airbnb-style holiday home hotspots in England and Wales are concentrated around coastal areas. Despite uncertainty around interest rates, buying an Airbnb-style holiday rental can still be an exciting investment, especially with house prices stalling.
The Cotswolds, Cumbria, and the Lake District are the most profitable Airbnb-style holiday let locations in the UK. While the Bank of England's interest rate cut uncertainty and Jeremy Hunt's plans to scrap the FHL regime may deter some buyers, the potential for high returns remains. The popularity of staycations and the concentration of Airbnb-style holiday homes in coastal areas further boost the appeal of investing in Airbnb-style holiday lettings.
