UK Holiday Let Property Buying News

What’s happening in the UK holiday let market as we head towards 2027? For a start, demand for UK holiday accommodation remains significant. At the same time holiday let buyers face a combination of taxation, regulation and local charges including recent developments around plans for overnight visitor levies in England, changes to business rates guidance, and confirmation that England’s national short term let register is likely to come into play by March 2027.

For anyone considering buying a holiday let, it’s important to keep up with the latest developments. Here’s our round-up of autumn’s UK holiday let property buying news.

Demand for UK holiday lets remains strong

We’re seeing encouraging signs for people who are considering investing in the UK holiday let market. Take the latest research from Cumberland Building Society, which says 88% of mortgage brokers surveyed had noticed increased holiday let mortgage enquiries over the last 12 months, with almost a third reporting a ‘significant’ increase. They also found 30% of existing holiday let property owners intended to buy another property within the next 12 months.

Of course, this doesn’t guarantee demand will stay strong everywhere. Holiday let performance varies according to the location’s appeal, the type of property, pricing and competition as well as seasonality. On the other hand the latest numbers suggest interest in holiday let investment is still robust despite the various tax and regulatory changes we’ve seen in recent years, and those to come.

There’s good evidence of high consumer demand for short term accommodation. Office for National Statistics figures show guests spent more than 100.9 million “guest nights” staying in UK short term lets through 2025, an increase of 11.5% on 2024, and UK visitors accounted for 67.2% of those guest nights.

For buyers looking towards 2027, this reinforces the importance of researching actual local demand, not just assuming every UK location delivers the same results.

Will a tourist tax add to holiday let costs?

One of the biggest recent developments is the Government’s decision to give certain local authorities in England powers to introduce an Overnight Visitor Levy, as announced on 10th September. The scheme will let Mayoral Strategic Authorities and Foundation Strategic Authorities charge a levy on overnight accommodation if they want to, and the levy will be a percentage of the cost of the accommodation, not a flat fee. If they decide to introduce the scheme, they can choose how to spend the money they raise.

The Government says the money could be invested in things like public spaces, improving local infrastructure, supporting events and boosting tourism. From a holiday let ownership perspective, the levy is another factor to consider when calculating the potential income and costs of buying and owning a holiday home.

Scotland has already taken steps. Edinburgh introduced a 5% levy on overnight accommodation in July and Aberdeen is set to introduce its own 7% levy from April 2027. Stirling and West Dunbartonshire have also set up schemes to kick off in 2027, as has Glasgow, which will apply a 5% levy for the full length of a stay from 25 January 2027.

Wales is moving faster than England. All visitor accommodation in Wales, including holiday lets, must be registered from autumn 2026. Welsh councils will also be able to introduce a visitor levy from April 2027. Unlike Scotland’s percentage-based schemes, the Welsh levy is a flat charge per person per night: £1.30 for most accommodation, including holiday lets. A licensing scheme for visitor accommodation has also been passed into law, with details still to follow.

Wales already has stricter business rates rules than England. To be rated as self-catering, a Welsh holiday let must be available for at least 252 days a year and actually let for at least 182. Properties that fall short pay council tax, and Welsh councils can charge second home premiums of up to 300%. For buyers looking at Welsh properties, realistic occupancy figures are especially important.

Could holiday lets lose their business rates advantage?

Another important issue for buyers is the future of business rates. At the moment, qualifying self-catering holiday lets in England can be assessed for business rates, not Council Tax. To qualify, the property has to be available commercially for at least 140 nights a year, let for at least 70 of those nights, and available to let for at least another 140 nights during the 12 months to follow.

The Government is now looking closely at how short-term lets are taxed. In a written answer to Parliament on 10 September, Treasury minister James Murray confirmed the government is reviewing the tax treatment of short-term lets, including self-catering holiday lets. He also acknowledged concerns that some second home owners are using Small Business Rate Relief mainly to reduce their tax bills rather than to run a genuine local business. A response to the government’s call for evidence is expected “in due course”.

This matters because many holiday lets currently pay little or no business rates. Small Business Rate Relief gives 100% relief to single-property businesses with a rateable value of £12,000 or less, tapering off up to £15,000. In mid-September, press reports suggested the Chancellor is considering whether some holiday lets should be treated as second homes for tax purposes. That would mean paying council tax instead, potentially including a second homes premium of up to 100% in many areas of England. No threshold, start date or draft rules have been announced.

For now, nothing has changed, and current Valuation Office Agency (VOA) guidance still sets out how eligible self-catering holiday lets qualify for business rates. But if holiday lets lost access to business rates and small business relief, running costs could rise significantly for some owners, especially where a property’s viability depends on paying little or no rates. With the Autumn Budget approaching, it’s wise not to base a buying decision on today’s tax position alone.

National holiday let register expected in 2027

The Government has confirmed England’s mandatory national register of short term and holiday lets will be fully operational by March 2027, but the fine details are yet to be clarified. In the meantime, it makes sense to bear it in mind and check the details as soon as they are confirmed.

What does the latest holiday let news mean for buyers?

The current market presents a mix of fresh opportunities and extra considerations. The latest research suggests demand for holiday let finance and investor interest are still strong. At the same time, buyers need to account for more complicated regulations and taxes.

Before buying a property, it is worth looking beyond the headline nightly rate and asking some common sense questions like:

• What is the property’s realistic annual occupancy?
• How strong is demand outside the peak holiday season?
• What are similar holiday lets in the area actually achieving?
• Will the property qualify for business rates?
• Is a local visitor levy on the cards?
• Which extra registration / regulatory requirements are coming in for 2027?
• How will your finances look if occupancy or nightly rates are lower than you expect?
• Can you still pay the mortgage and other property costs during quiet periods?

The Cumberland research we mentioned earlier illustrates all this nicely. It found 47% of holiday let owners had increased their nightly rental rates and 46% had increased occupancy following the recent tax changes. Perhaps now more than ever, a successful holiday let depends on understanding the numbers and managing the property strictly as a business.

Keeping an eye on the UK holiday let market

The latest UK holiday let property buying news suggests demand is still a vital part of the picture, but an area’s popularity with holidaymakers isn’t enough to base a decision on. As well as local demand you’ll need to factor in realistic occupancy rates, financing costs, tax, business rates and regulation as the market evolves. As you can imagine, getting professional mortgage and financial advice before committing to buy is more important than ever.

Frequently asked questions

Is demand for UK holiday lets expected to remain strong in 2027?

Recent research reveals a continuing strong interest in the holiday let sector, with 88% of mortgage brokers surveyed by Cumberland reporting more holiday let mortgage enquiries over the last 12 months. Because demand varies between locations and properties, you should always carry out detailed local research rather than relying on national stats.

Will holiday lets have to pay a visitor tax in England?

Not necessarily. The Government is giving some local authorities the power to introduce an Overnight Visitor Levy, but it will be up to individual authorities to decide whether or not to do it.

Can a holiday let still qualify for business rates?

Yes. Current Valuation Office Agency (VOA) guidance confirms qualifying self-catering holiday lets in England can still be assessed for business rates. However, the Government is reviewing the tax treatment of short-term lets, including whether some should pay council tax as second homes instead. Prospective buyers should keep an eye on any announcements, particularly at the Autumn Budget.

We’re always happy to help

How does the latest UK holiday let property buying news affect your plans, if at all? As holiday cottage mortgage experts we’re always pleased to help and advise, and it costs nothing to talk. Feel free to contact our friendly team.