The weakness of the pound since Britain’s decision to quit the European Union a year ago means that holiday properties are now generating double the annual income of residential buy to let units, a vacation investment firm claims.
Second Estates says the UK’s short-term holiday let market is experiencing a boom, with average income per booking up 6.4 per cent in the first four months of 2017.
It claims the UK now has 165,000 holiday let properties, with the average property generating annual rental income of £22,281 in 2016. This is double the average of £11,052 for residential properties, “where rents are currently declining in many areas” according to the firm.
It says that in peak season, the average holiday let property generates £1,200 a week, almost six times the average weekly rent in the UK.
The areas of the UK where holiday let rental growth was fastest in the first four months of 2017 were the south of England (up 17.3 per cent); Cornwall (up 14.5 per cent) and Devon (where the increase was 8.9 per cent).
Second Estates, which makes the claims after analysing 8,239 holiday properties across the UK operated by one holiday lettings agency, says the growth in rental income is being driven by increasing domestic and international demand for short term stays in popular holiday destinations in this country.
It says that there were a record number of visits to the UK in 2016 (37.6m) and overseas visitors contributed £22.5 billion to the UK economy. The number of overseas visitors increased 7.0 per cent in the first three months of 2017 compared to the same period in 2016 and the amount they spent increased by 11.3 per cent.