Report also reveals increase in demand for holiday lets across the UK
Blaenau Gwent in southeast Wales has topped the list of the best places in the UK to invest in a holiday let, according to a new report from Sykes Holiday Cottages.
With house price growth currently at 12% year on year, and an average revenue potential of almost £20,000 per year, the report said the county borough offers excellent long-term potential for anyone looking to invest.
Denbighshire and Rhondda Cynon Taf followed closely behind in the new ranking. The Isle of Bute came in fourth, with the easily accessible island the only place in Scotland to make it into the top 10.
The Holiday Let Outlook Report 2022 analyses Sykes Holiday Cottages’ revenue data, alongside current house prices and house price growth, to determine the long-term investment potential of holiday letting across the UK.
The report also contains consumer research, Sykes’ booking figures and insights from rental data and analytics company AirDNA, to paint a clear picture of the UK’s holiday let market.
According to the poll of UK holiday homeowners commissioned for the report, a quarter (25%) only started letting during the pandemic, with the staycation boom fuelling a rise in second homeowners and investors entering the market.
Bookings for Sykes’ holiday lets in 2022 went up by 35% compared to pre-pandemic levels – a number that is expected to jump even further as the summer months approach.
The consumer research found that 84% of holiday let owners said bookings for 2022 were stronger than ever, with the same number confident the trend would continue to grow over the next five years.
The report also highlighted that, compared to the same period in 2021, Sykes had seen new owner enquiries from prospective holiday home investors almost double, increasing by 78% in 2022.
It was also found that the average holiday let owner earned £28,000 in revenue from their holiday let last year, up from £21,000 in pre-pandemic 2019.
Graham Donoghue, chief executive at Sykes Holiday Cottages, said that the shift towards staycations had already begun before the pandemic, and COVID had just accelerated the trend.
“The figures speak for themselves – bookings so far this year are up 35% compared with 2019 and the average income of a holiday let owner grew by almost the same amount last year versus 2019 – demonstrating the incredible investment potential that holiday letting can bring,” Donoghue pointed out.
“With the UK travel sector flourishing, this will continue to have a positive impact on the economies throughout the country that rely on tourism, particularly in coastal and countryside regions. In fact, nine in 10 holiday let owners we surveyed think that tourism strongly benefits the local areas around their holiday homes.”
Jamie Lane, vice president of research at short-term rental data and analytics company, AirDNA, said that with holiday let demand getting stronger, the sector is expected 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,” Lane added.