Best Places to Buy a Holiday Home in the UK for Investment

As the UK begins to emerge from 18 months marred by COVID-19, pent-up travel eagerness has led many Brits to explore their own country. Through the worst of the pandemic, Brits still travelled, albeit closer to home; rural towns and seaside getaways served as a respite from the throes of the virus. 

As of 2nd August, the UK allows vaccinated travellers from the U.S. and EU member states to enter and travel within the UK without quarantining — a sign the UK travel industry’s recovery is on the horizon. 

With what’s expected to be more a flood than a trickle of travellers, the time is right for buying a holiday home for investment. But the real question is, where is the best place to buy a holiday home in the UK?

The answer depends on multiple factors, including why you’re buying a holiday home in the first place: are you considering starting a holiday let business? Or looking for supplementary income options? Whatever your reasons, having accurate Airbnb data is crucial to finding and buying a holiday let that’s right for you. 

And we’ve done just that. We’ve identified the top 40 best places to buy a holiday home in the UK. For many, the list will include some surprises. But don’t worry; we explain how we arrived at this list, detail the factors used, and give you the tools and Airbnb analytics you need to find the property that’s right for you.

How We Determined Where Buying a Holiday Let is the Most Lucrative

Several factors go into the makeup of 2021’s best places for buying a holiday home for investment in the UK. For this list, we considered four crucial metrics: annual revenue, occupancy rates, and average daily rates (ADR).

• Annual Revenue: Last Twelve Months (LTM) or total monthly listing revenue in GBP. Includes cleaning fees but not other additional fees.
• Occupancy Rate: Total Booked Days / (Total Booked Days + Total Available Days). The calculation only includes vacation rentals with at least one Booked Night
• Average Daily Rate (ADR): ADR = Total Revenue / Booked Nights. Includes cleaning fees.
• RevPAR: Revenue Per Available Rental and is calculated by multiplying the Average Daily Rate (ADR) by the occupancy rate.

Most of the best places to buy a holiday let in the UK may not be the biggest

While population centres like London, Manchester, Birmingham are certainly worth exploring (and do offer excellent holiday home investment opportunities), the hottest spots for a holiday home investment reach well beyond the UK’s most densely populated spaces.

Perhaps unsurprisingly, that’s due to where people currently feel safest travelling within the country; staying in tightly-packed apartments in London didn’t top most travellers’ lists of preferred pads during the height of the pandemic. Rather, guests sought space from others and the concrete-heavy environs. Many of these markets make up the best places for buying a holiday let in the UK.

The Best Places for Buying a Holiday Home for Investment in the UK in 2021 Based on Annual Revenue

The Best Places to Buy a Holiday Home Based on Occupancy Rates

When you buy a holiday home, look beyond just revenue. Let’s be clear here: revenue is a huge component. After all, why get into the space if you’re not focusing on generating revenue? That stated you need to consider occupancy rates as well. Occupancy rates give a good glimpse into rental activity in the market and, as of summer 2021, these are the best places for buying a holiday let in the UK based on those rates.

The Best Places to Buy a Holiday Let in the UK Based on Average Daily Rates (ADR)

Considering annual revenue is essential. However, it’s well worth your time to dive into what rates look like on a day-to-day basis.

These daily rates depend on several factors, not least of which is seasonality. Many destination markets experience more drastic swings in pricing depending on the season, whereas larger urban spaces historically have relatively steady occupancy rates and revenue throughout the year.

Consider this: if your target market’s annual revenue is high but most of its revenue is generated in the warmer months, you should plan to adjust your Airbnb prices to capitalise on higher demand. Conversely, you’d be wise to reduce your rates when there are fewer tourists to keep occupancy as steady as possible; less revenue is better than no revenue. 

For example, seasonality heavily influences ADRs in Gwynedd. Understandably, May to September brings more guests, while fewer guests visit the Welsh county between October and April. When exploring these and other markets, be sure to factor in seasonality and how it impacts ADRs.

Easily Compare the Best Places to Buy a Holiday Home in the UK with AirDNA

By now, you likely have a good sense of where starting a holiday let business makes the most sense — but these combined lists are just the launchpad for your exploration.

Most aspiring hosts and investors inevitably land on multiple markets, meaning they need to compare those markets to make an informed decision. AirDNA’s market comparison tool makes it easy. Simply enter up to four markets and see how they perform next to each other.

Be sure to filter for revenue, ADR, or occupancy, as well as bedroom count and guest accommodation to get an even better sense of where properties align or depart in performance. You can even evaluate markets based on postcodes, as neighborhoods in even rural markets at times perform better than others.

Learn How Much You Can Earn with AirDNA’s Holiday Home Mortgage Calculator

If you have a specific property in mind, see how much your holiday home can earn with Rentalizer. All you need to do is enter your holiday home’s address and you’ll instantly see its earning potential. You’ll also get granular data on how your holiday home mortgage and other expenses factor into your earning potential. 

With Rentalizer and MarketMinder, you’ll have all the information you need for buying a holiday home for investment.