While Cornwall remains a popular staycation spot, holiday let owners in the Cotswolds are raking in the most profits in 2023, with luxury properties commanding up to £55,000 per week. As inflation is projected to decrease and home equity poses challenges for homeowners, the dynamics of the holiday let market and economic factors continue to evolve.
Cornwall, known for its beaches and fishing coves, remains a popular staycation destination in the UK, but it is not the most profitable for holiday let owners. Data from Sykes Holiday Cottages indicates that the Cotswolds, stretching from Stratford-upon-Avon to Swindon and Gloucester to Oxford, is the most lucrative region in 2023 for short-term rentals. The average holiday home in this region earns £28,500 annually, reaching £46,300 for high-end properties.
The Cotswolds has gained popularity not only among British tourists but also international visitors, including Americans and Europeans. Luxury properties, such as North Lodge Blenheim, can command up to £55,000 per week.
Cumbria and the Lake District follow, with average earnings of £28,200 per year, and Dorset comes next with £27,000. Despite Cornwall’s tourism appeal, it ranks fourth alongside the Peak District with an average income of £26,500 annually.
In the UK, inflation is expected to decrease significantly due to lower energy prices, potentially reaching the government’s 2% target. However, issues such as high auto insurance costs, which have risen 22% over the past year, continue to affect consumer expenses. Premiums have increased due to the higher value and cost of car repairs.
Lastly, rising home equity, now valued at $31.8 trillion across American households, poses challenges for homeowners seeking to access it. Reverse mortgages remain underutilized despite their potential benefits for retirees with limited savings.
Overall, the holiday let market continues to thrive in certain regions, while economic factors such as inflation and home equity management remain critical considerations for homeowners.