Forget Cornwall: This Seaside Town Is the New Holiday Home Capital
Cornwall is well-known as Britain's top vacation spot, attracting over five million visitors annually.
However, a recent study indicates that for investors, the new prime location for holiday homes lies far to the north.
Research conducted by Sykes Holiday Cottages reveals that holiday rental proprietors in Northumberland, situated in north-east England, experienced a profit surge of more than a third over the past year. In contrast, rental returns increased by 8% in Cornwall, according to the report.
The report from the holiday cottage rental agency compared the average yearly earnings for holiday lets listed in various villages between 2022 and 2023. The findings showed that the four villages with the highest income growth were all located in Northumberland.
In Seahouses, a village within the Northumberland Coast National Landscapes area, rental income soared by 36% to £29,700 annually.
Bamburgh, located further north, saw a 25% increase, bringing the average income to £30,100. Alnwick and Alnmouth also experienced above-average rental growth, according to the report.
Andrew Fox, chair of Visit Northumberland, expressed his delight at the news, noting the steady increase in tourist numbers in recent years.
He stated, “It’s fantastic to see the rising demand and profitability of holiday cottages in various parts of Northumberland, reflecting the growing interest in the county's remarkable attractions, locations, and experiences.
“Northumberland offers significant opportunities for property owners, whether on our beautiful coastline, within our serene landscapes, or in our charming towns and villages.”
Overall, the highest income was recorded in Grasmere, Cumbria, where holiday let owners earned £43,100 annually in 2023.
In Ambleside, just north of Windermere, the average annual income was £32,900, the analysis revealed.
Sykes’ data indicated that the average income for a British holiday let owner is £24,500. A quarter of holiday let owners rely on their property to generate retirement income, according to the agency.
Graham Donoghue of Sykes Holiday Cottages commented, “With an abundance of activities and sights in Northumberland – including easy access to a National Park and beaches – it’s no surprise that holiday let owners are seeing a notable rise in bookings and yearly income as a result.”
This development comes amid a government crackdown on holiday let owners, impacting property owners.
In the Budget, Chancellor Jeremy Hunt eliminated the furnished holiday lettings regime, which previously allowed holiday let owners to qualify for “business asset disposal relief,” enabling them to pay capital gains tax at 10% upon sale.
This follows nearly 2,000 inquiries launched by HMRC into holiday lets in the 2023 financial year – a twentyfold increase from the previous year – as tax authorities target the surge in Airbnb and other short-term rentals since the pandemic-driven staycation boom.
