The UK staycation market has experienced significant growth in recent years and shows no signs of slowing down anytime soon. As a result, demand for short-term rentals and holiday lets remains strong, driven by post-pandemic staycation trends, flexible working, and a growing preference for more space and home-like experiences.
As a result, buy-to-let holiday home investment has become a lucrative opportunity for investors who want to capitalise on the UK staycation market boom and tourism-driven demand. In this article, we’re going to explain the main benefits of purchasing a buy-to-let holiday home so you can determine whether it’s the right investment option for you.
What is the difference between a holiday buy-to-let and a traditional buy-to-let?
Before we delve into the specifics of buying a holiday let, it’s essential to understand how they differ from traditional buy-to-let properties. A holiday let is a short-term let that is rented for a short period, from one night up to 31 days at a time. A traditional buy-to-let is a long-term let, which is usually rented from 6 months to a year at a time, but can be longer.
Short-term holiday lets can enjoy certain tax benefits provided they are available and bookable for at least 210 days a year and let for at least 105 days of the year.
The benefits of having a buy-to-let holiday home
There are many reasons to consider purchasing a buy-to-let holiday home. We’ve listed some of the main benefits below.
Higher income potential
Investing in property is a good way to earn passive income, and investing in a buy-to-let holiday home offers some of the highest returns on investment. Short-term lets, like holiday homes, often have higher yields than longer-term monthly rents, especially in peak seasons. Rates can be adjusted based on seasonal demand, so you generate increased income in busy seasons while maintaining steady yields in quieter months.
Growing demand for staycations
The UK staycation market has grown significantly in recent years, fuelled by the COVID-19 pandemic and rising living costs. This has led to a growing demand for holiday lets in the UK, particularly in areas with a strong tourism market, such as areas of natural beauty, seaside towns and vibrant cities.
New areas, such as lesser-known Welsh seaside towns and the Scottish Highlands, are gaining popularity for those looking for peace from city life. These areas provide affordable yet luxurious options, blending natural beauty with comfort and accessibility. These are ideal areas to invest in buy-to-let holiday homes, as you can benefit from increased capital growth over the years as demand increases in these areas.
According to data from Future Market Insights, the UK staycation market is expected to continue to experience strong growth, with estimates of growth from USD 32.8 million in 2025 to USD 59 million in 2035, representing a CAGR of 6.1%. Various things are contributing to the growth in the UK staycation market, such as:
- Rising cost of living resulting in less disposable income to spend on holidays abroad, prompting more affordable alternatives for travel, leading UK residents to stay local
- Concerns around carbon emissions and individuals’ carbon footprints
- A need for spontaneous, low-cost holidays
- An increase in popularity around exclusive local experiences
- Wellness tourism boom
All of this combined makes owning a buy-to-let holiday home a strong investment, not just now but for the future, too. Premium holiday lodges in particular, and holiday homes with a high spec finish will be particularly popular and demand the highest prices, so look for properties with great amenities, and highly sought after features such as hot tubs, saunas, outside eating spaces and modern furnishings.
Personal use and lifestyle benefits
If you own a buy-to-let holiday home, you can still use the property yourself for holidays, combining your investment with leisure. This means you could potentially have an asset that generates passive income for you, as well as somewhere to enjoy yourself and stay for free if you want to take a break. It can also become a future retirement home if it’s in a location you’d like to retire to or even a family vacation spot.
Tax benefits
A holiday let can be a tax-efficient business opportunity. Holiday lets may be eligible to pay business rates instead of Council Tax, which could work out more affordable or even cost nothing if you are eligible for Small Business Rate Relief. There can also be Capital Gains Tax (CGT) benefits to owning a holiday let when you choose to sell.
Capital appreciation
Holiday lets purchased in prime locations often appreciate in value over time, so you can increase your ROI in the long term.
Minimal management required
Many holiday lodge investments come with a fully managed letting option. This minimises the stress of bookings, management, marketing, guest check-ins and queries and cleaning and maintenance. This makes it a great option for investors seeking a passive income stream with minimal stress or input, especially compared to traditional buy-to-let or HMOs.
What makes a good holiday let location?
When considering purchasing a holiday let property, it’s important to check for an area with the best potential for holiday letting. Check the supply and demand in the area you are considering for investment.
Good locations for buy-to-let holiday homes are those which already have a high demand for fully furnished short-term let accommodation, such as major cities, seaside resorts, areas of natural beauty or historic locations. If you’re investing with a long-term perspective, it could be worth looking at new up-and-coming tourist areas that are projected to experience continual growth, thanks to regeneration projects or new attractions opening and local amenities nearby.
Buy-to-let holiday homes to invest in
At Advantage Investment, we specialise in sourcing the best properties and working with proven developers with a strong track record in their market to provide our clients with offerings with the highest earning potential. We have a selection of luxury developments that are ideal for investors looking for buy-to-let holiday properties to add to their portfolio.
Cairns Hill Luxury Lodges – Scotland
Cairns Hill Luxury Lodge investment is located in New Cumnock, Scotland, set within the scenic Glen Afton landscape. This exclusive collection of premium holiday lodges overlooking the River Nith combines modern luxury with local heritage to meet the growing demand for countryside retreats in the UK’s staycation market.
Phase One features 10 high-spec lodges, including one-bedroom and three-bedroom units, equipped with all the amenities and fixtures desired by holidaymakers. Each lodge sits on gently rolling hills with river views. They have easy access to valleys, lochs, and nature reserves and the area is steeped in history. The Cairns Hill Lodge Investment offers stable income, managed by an experienced company that transforms unused sites into premium holiday destinations.
Set to be completed in 2026, it offers a projected yield of 9%.
Find out more about this investment opportunity here.
Off-Market Coastal Investment – Newquay
This off-market coastal investment opportunity, located in Newquay’s thriving tourism and coastal property market, offers high projected yields of 15%. This brand-new aparthotel development offers fully managed, income-generating units with high-yield potential, and it is backed by an experienced serviced accommodation operator.
Located just two minutes from Towan Beach and Newquay town centre, this prime property allows investors to benefit from strong rental returns. Moreover, it offers long-term capital growth in one of the UK’s most popular coastal destinations.
This newly transformed aparthotel meets the rising demand for short-stay, serviced accommodation across the UK. As domestic tourism continues to grow, Newquay enjoys increasing year-round visitation, meaning demand often exceeds supply. The development is fully managed, turnkey, and professionally operated by Guestz, so investors can enjoy a hands-off experience with secure income and strong occupancy rates.
Find out more about this investment opportunity here.
Red Wharf Bay – Anglesey
This luxury holiday lodge investment opportunity is located in the stunning Red Wharf Bay in Anglesey. Offering luxury 3-bed eco-friendly accommodations, combining exclusivity, sustainability, and profitability, set on 1.5 acres of scenic countryside, just a short walk from the beach. Each lodge is finished to the highest spec, with modern interiors, private hot tubs, and dedicated parking.
Offering projected returns of 10%, this is the ideal short-term holiday let investment. Located in the popular holiday spot, Anglesey, which is known for its stunning landscape, coastal views, extensive local dining options and array of nearby attractions that drive tourists there year after year.
Download our Anglesey investment guide or review our fact sheet to learn more about this opportunity.
Advantage Investment can help you choose the right buy-to-let holiday investment.
Now you’re aware of the benefits of buy-to-let holiday homes and some of the investment options currently available, you may be ready to take the next step and start your investment journey. At Advantage Investment, we have a team of property investment experts who can help you find the right holiday let for your goals and budget.
We specialise in sourcing high-potential properties that are either in planning or under construction. This allows us to offer properties below market value, so our clients can benefit from substantial capital appreciation and long-term growth. Most of our clients prefer this strategy due to the potential for significant returns, but we understand every client is unique, which is why we tailor our services to meet your specific needs.
If you’re looking for property investment options or advice, get in touch with our team today to arrange a free consultation. We can discuss your investment goals, provide tailored advice, and help you source the perfect investments for your portfolio.
