Is it Time to Invest in UK Holiday Lets?

Investing in UK holiday lets is starting to hit the consciousness of mainstream UK property investors thanks to a number of factors that have heightened its popularity recently.

The UK holiday let investment market is growing, and it’s easy to see why. The UK has a thriving tourism industry, with millions of visitors flocking to its captivating landscapes, historic sites, and vibrant cities each year, ensuring a consistent demand for holiday accommodation.

Additionally, the UK government provides tax incentives for holiday let owners, such as favourable capital gains tax treatment and potential eligibility for business rates relief. With the right location and investment strategy, investing in UK holiday lets can be a profitable venture, providing both financial returns and personal enjoyment.

There’s also the matter of current economic conditions that mean that many people in the UK are planning to holiday in the UK for the foreseeable future. This follows a shift in behaviours over the last few years. During the pandemic, with travel restrictions in place, many took holidays in the UK and saw the benefit of a more environmentally friendly trip as well as boosting the domestic economy.

According to Statista, UK holidays have grown by 18% in just 3 years since 2020, signifying a growing and steady trend.

Are holiday lets a good investment?

This is a question we’re increasingly being asked from clients looking to diversify their investment portfolio, and whilst we can’t answer that definitively for every single person’s circumstances, we can provide you with some data to show what the market looks like right now.

According to Property Reporter, for example, holiday lets have an average rental yield that is 16% higher than the 2022 average for residential properties.

Looking at BBC data, holiday let investment properties have increased by a staggering 40% in the year between 2020 and 2021, indicating a huge increase in supply for an asset class that is growing massively in popularity.

When we also consider some of the properties that we have available, for example in the Isle of White, we’re offering 10% NET returns for 5 years, a 100% guaranteed buyback after 5 years as well as no capital gains tax, stamp duty or council tax.

Compared with standard residential property investment this represents a very impressive return on your initial investment, and with entry prices similar to the domestic market, it’s a very accessible asset class too.

How much income can I make from a holiday let?

It depends on the investment but, for example, on our Isle of White investment, the return on investment (ROI) is £412,500 over 5 years.

This varies across the market, but with 10% NET returns it’s hard to find a more competitive asset right now, especially in the current economic conditions.

Invest in UK holiday lets with Knight Knox

The domestic UK holiday market continues to be one of the most profitable avenues for investors looking to diversify their property portfolio.

With this in mind, we have expanded our portfolio to offer investors the chance to purchase luxury holiday lodges in the UK’s leading domestic holiday locations.

If you’re interested in investing in this increasingly popular market for UK holiday let investment then why not get in touch today?