With about 50% of UK adults planning to use a holiday home in the near future and 61% of existing holidaymakers indicating similar interests, now is a great time to purchase a holiday home for savvy investors looking to capitalise on this trend.
Moreover, 70% of holidaymakers say the most important thing to them when booking a holiday rental property is “things to do nearby.” As a result, the best places to buy a holiday home for high returns on investment (ROI) in 2024 and beyond are up-and-coming cities with major development projects and other tourist attractions like national parks.
With new luxury apartments from API Global in major UK cities, investors can invest early and accrue not only rental income but also capital gains over the long term. This guide outlines the 7 top UK locations for holiday home investment and recommendations for building a successful portfolio and maximising rental income.
The Best Places to Buy Holiday Homes in the UK: Our Top 7 Picks
The following table summarises where to buy a holiday home in the UK for significant returns.
| City | Annual Visitors (Tourists) | Property Price (Average) | Rental Yield (Average) |
| London | 1.8 Million | £525,538 | 5% |
| Devon | 6 Million | £330,352 | 4.2% |
| North Wales | 22.7 Million (Annual Day Trips) | £233,867 | 4.9% |
| The Lake District | 18 Million | £291,247 | 8.52% |
| Dorset | 12.6 Million (Annual Day Trips) | £393,180 | 3.67% |
| Cornwall | 5 Million | £341,424 | 4.4% |
| Northumberland | 7.7 Million | £205,308 | 7% |
Continue reading for more details on each location.
1. London: Park Avenue Place
- Annual Visitors (Tourists): 30 Million+
- Average Property Price: £516,000
- Average Rental Yield: 4.19%
London remains an attractive location for holiday home investors seeking strong capital growth. According to Savills, prime central London property values are predicted to increase by over £70k by 2028.
For investors seeking an up-and-coming UK property area with the potential for significant capital appreciation, Deptford in southeast London is an ideal location. Park Avenue Place, developed by API Global’s partners, offers luxury one- and two-bedroom apartments starting from £400,000 (Investors can start with a 20% down payment). The development is situated opposite Deptford Park, with direct connections to central London in as fast as 6 minutes.
Rents and buy-to-let property values in Deptford have been rising steadily over the past decade as the area has become increasingly gentrified. The nearby Deptford Market and popular cafés, restaurants, and bars are attracting young professionals to the area. For investors, the potential dual income from capital growth and attractive rental yields make Deptford a lucrative investment option. Two-bedroom apartments at Park Avenue Place currently achieve rental yields of about 5.24%.
The luxury apartments feature high-end fixtures and fittings, concierge service, residents’ gym, landscaped gardens, and underground parking. Prices at Park Avenue Place are still below the London average, offering investors the opportunity to benefit as property values catch up with neighbouring areas like Greenwich. Southeast London’s popularity is only set to increase in the coming years, ensuring healthy demand and a tight supply of rental accommodation.
2. Devon
- Annual Visitors (Tourists): 6 Million + (Northern Devon)
- Average Property Price: £330,352
- Average Rental Yield: Up to 4.2%
One of the main reasons why Devon stands out as one of the best places to buy holiday homes in the UK is its stunning coastline. Boasting over 12 sandy beaches, rugged cliffs, and charming seaside towns, this region offers endless opportunities for relaxation and enjoyment. From the famous beaches of Woolacombe and Bantham to the dramatic cliffs of the Jurassic Coast, Devon’s coastline is a paradise for beach lovers and outdoor enthusiasts.
But there’s more to Devon than its coastline; the county is also home to two national parks: Dartmoor and Exmoor. These breathtaking landscapes provide ample opportunities for hiking, cycling, and exploring the great outdoors. Imagine owning a holiday home in the heart of these natural wonders, allowing you to escape the hustle and bustle of everyday life and immerse yourself in tranquillity.
In addition to its natural beauty, Devon is also renowned for its rich history and cultural heritage. The county is dotted with charming villages, historic castles, and ancient ruins, offering a glimpse into the region’s past. From exploring the cobbled streets of Clovelly to visiting the iconic cathedral in Exeter, there is no shortage of cultural experiences to be had in Devon.
Devon’s vibrant food scene is another reason why it is one of the best places to buy Airbnb property in the UK. The county is known for its delicious local produce, including fresh seafood, dairy products, and traditional West Country fare. Indulging in a cream tea or sampling locally brewed cider is a must for any visitor to Devon.
3. North Wales
- Annual Day Trips: 22.7 Million
- Average Property Price: £233,867
- Average Rental Yield: Up to 4.9%
North Wales stands out as a top destination for buying a holiday due to its breathtaking landscapes — from the stunning coastline along the Irish Sea to Snowdonia National Park’s majestic peaks, this region is a haven for outdoor lovers. Imagine waking up to panoramic views of rolling hills, cascading waterfalls, and serene lakes right outside your doorstep. This, coupled with ample opportunities for hiking, biking, and exploring, makes North Wales a destination for endless adventures and a great choice for nature lovers.
In addition, North Wales is steeped in history and culture. The region is home to numerous castles, including the magnificent Conwy Castle and the enchanting Caernarfon Castle, which are UNESCO World Heritage Sites. Exploring these ancient fortresses and wandering through the narrow streets of mediaeval towns like Conwy and Beaumaris is like stepping back in time.
North Wales is also known for its vibrant cultural scene. The area is rich in traditional Welsh music, arts, and festivals, allowing you to immerse yourself in the local heritage. Enjoy a night of singing and storytelling in a cosy pub or attend a lively Eisteddfod, a celebration of the Welsh language and culture.
Lastly, North Wales offers a wide range of attractions for all ages. From adrenaline-fueled adventures at Zip World and Adventure Parc Snowdonia to family-friendly attractions like the Welsh Mountain Zoo, there is no shortage of entertainment options.
4. The Lake District
- Annual Visitors (Tourists): 18 Million+
- Average Property Price: £291,247
- Average Rental Yield: Up to 8.52% (Cumbria)
With its shimmering lakes, towering mountains, and lush green valleys, The Lake District is a top place for holiday buy-to-let in the UK. Imagine waking up to panoramic views of serene waters and majestic peaks, with endless opportunities for outdoor activities right at your doorstep.
The region is home to the famous Lake Windermere, the largest natural lake in England, as well as numerous other stunning bodies of water, such as Ullswater, Derwentwater, and Coniston Water. These picturesque lakes offer a variety of recreational activities, including boating, kayaking, and fishing, allowing you to fully embrace the tranquillity and serenity of the surroundings.
In addition to its natural wonders, The Lake District is dotted with charming villages and towns that exude a timeless charm. Places like Ambleside, Keswick, and Grasmere are not only picturesque but also offer a range of amenities, including cosy pubs, quaint shops, and delightful cafes. The local communities are welcoming and vibrant, providing a sense of belonging and a chance to immerse yourself in the rich cultural heritage of the area.
Last but not least, the Lake District is a haven for hikers of any experience level due to its wide trail network. From strolls along the lakeshores to challenging hikes up the fells, there is something for every outdoor enthusiast. Exploring the region’s scenic paths will not only keep you fit but also reward you with breathtaking vistas and a deep connection with nature.
5. Dorset
- Annual Day Trips: 12.6 Million
- Average Property Price: £393,180
- Average Rental Yield: 3.67%
From the iconic limestone arch of Durdle Door to the golden sands of Studland Bay, Dorset boasts some of the most iconic beaches in the UK. It’s a city to enjoy the sound of crashing waves and long walks along the shoreline, with opportunities for swimming, sunbathing, and water sports right at your fingertips. If you seek the best places for holiday home investments for long-term returns, then Dorset should be at the top of your list.
In addition to its coastal splendour, Dorset is steeped in history and culture. The county is home to the UNESCO World Heritage Site, the Jurassic Coast, where you can explore 185 million years of geological history, including fossils and dramatic cliff formations. The charming towns of Lyme Regis, Weymouth, and Swanage offer a glimpse into the past with their historic architecture, quaint streets, and bustling harbours.
Furthermore, Dorset boasts an abundance of natural wonders beyond its coastline. The rolling hills and lush countryside of the Dorset Areas of Outstanding Natural Beauty (AONBs) provide endless opportunities for hiking, biking, and exploring. From the tranquil beauty of the Cranborne Chase to the rugged landscapes of the Isle of Purbeck, nature lovers will find themselves immersed in a picturesque paradise.
Dorset also offers a vibrant culinary scene, with its local produce and seafood being a true highlight. From fresh fish and chips by the seaside to Michelin-starred restaurants showcasing the finest regional ingredients, the county is a food lover’s delight. Pair that with the numerous farmers’ markets and food festivals, and you have a recipe for gastronomic bliss.
6. Cornwall
- Annual Visitors (Tourists): 5 Million+
- Average Property Price: £341,424
- Average Rental Yield: 4.4%
If you’re looking for the perfect place to invest in holiday homes in the UK, Cornwall is a coastal gem that should be high on your list. Nestled in the southwestern part of the country, this captivating county offers a unique blend of stunning landscapes, rich history, and a vibrant cultural scene, making it an ideal destination for a seaside retreat.
In addition to its natural beauty, Cornwall is steeped in history and charm. The county is home to a wealth of ancient sites, including the iconic Tintagel Castle, believed to be the birthplace of King Arthur. The fishing villages of St Ives, Padstow, and Falmouth exude a nostalgic charm with their colourful cottages, narrow streets, and bustling harbours. Exploring Cornwall’s rich history and heritage is like taking a journey back in time.
Cornwall also offer a vibrant cultural scene that is sure to delight art enthusiasts and food lovers alike. The county is renowned for its thriving artistic community, with numerous galleries, exhibitions, and festivals showcasing local talent. From the famous Tate St Ives to the outdoor Minack Theatre perched on the cliffs, Cornwall offers a feast for the senses. And let’s not forget about the culinary delights — fresh seafood, traditional Cornish pasties, and cream teas are just a few of the mouthwatering treats that await you.
In summary, Cornwall’s natural beauty, rich history, and vibrant culture make it a top choice for investors seeking the best holiday let investments in the UK. Whether you seek relaxation by the sea, a journey into the past, or an immersion in art and culture, Cornwall has it all.
7. Northumberland
- Annual Visitors (Tourists): 7.7 Million+
- Average Property Price: £205,308
- Average Rental Yield: 7%
Northumberland’s breathtaking landscapes makes it an idyllic location to invest in a holiday home in the UK. Boasting an unspoiled coastline and rolling hills, the county is a haven for nature lovers. From the rugged beauty of Hadrian’s Wall to the vast expanse of Northumberland National Park, there are endless opportunities for outdoor adventures, including hiking, cycling, and birdwatching.
Another feature that makes Northumberland one of the best places for holiday homes is its serene environment, ideal for those looking for an escape from the hustle and bustle of everyday life. With its vast stretches of natural landscapes and a lower population density compared to other areas in the UK, Northumberland provides a sense of serenity and relaxation. Owning a holiday home here means having a tranquil retreat where you can unwind, recharge, and reconnect with nature.
Having had a good knowledge of the best places to buy a holiday home in the UK, investors should be looking at building their property portfolio. In the next section, we’ll explore how to go about this.
How to Build a Portfolio of Holiday Homes in the UK
Buying a second property can be an exciting venture, but it requires careful thought and planning to ensure a successful investment.
Here are a few key points to ponder before taking the plunge into building a portfolio out of holiday cottages:
- Understanding investment goals
- Accessing financial preparedness
- Understanding how to leverage mortgages
- Staying Informed
1. Understanding Investment Goals
The first step in building a portfolio of holiday homes is for an investor to clearly define their goals. Investors aimed at achieving a return on their investment property should strive to accumulate as many properties as possible that generate consistent revenue. This approach allows the investor to benefit from a steady stream of income during their ownership and potentially reap a significant return upon exit when the properties appreciate.
2. Accessing Financial Preparedness
Investing in holiday homes necessitates sufficient financial readiness, especially for international investors. Like any other business endeavour, property investment can come with unexpected expenses; these could range from sudden repair and maintenance costs to fluctuating real estate market conditions. Therefore, investors must be both financially and mentally prepared to handle the demands and uncertainties that come with the territory.
3. Understanding How to Leverage Mortgages
A smart strategy for building a portfolio and making money from property with low capital is leveraging a buy-to-let mortgage. Instead of using up entire savings to purchase a property outright, investors can borrow money to pay for a portion of the property. This approach allows investors to acquire more properties with the same amount of money.
Furthermore, the mortgage repayments can be financed by the rental income generated from the property. Once the property appreciates, the investor can sell it and receive a substantial return on their initial investment. This strategy effectively leverages debt to increase potential profits.
4. Staying Informed
Lastly, an investor’s success in the real estate market greatly depends on their ability to stay in the loop and adapt to the evolving landscape. This means constantly studying the market for new opportunities, trends, and potential threats. Keeping a pulse on the market allows investors to make timely and informed decisions — whether it’s buying a new-build property, adjusting rental prices, or even selling a property.
Above all, investors should strive to keep their holiday homes profitable. The best way to remain profitable is by ensuring a steady flow of potential rental income — read on as we outline helpful tips to achieve this in the next section.
5 Tips for Maximising Income From Holiday Homes
Knowing the best places to buy a holiday home isn’t enough; to build a successful property portfolio, investors must make conscious efforts to ensure profitability.
Here are five valuable tips:
- Optimise rental rates.
- Ensure year-round occupancy.
- Do regular maintenance and upgrades.
- Invest in effective marketing.
- Outsource property management.
1. Optimise rental rates.
The first step in maximising income from holiday homes is to set optimal rental rates. Investors must conduct thorough market research to understand the prevailing rental rates for similar properties in the area. Setting the rental rate too high can deter potential tenants, while setting it too low can undervalue the property and limit the investor’s income; the ideal rate should strike a balance between profitability and competitiveness.
2. Ensure year-round occupancy.
While holiday homes are popular during peak vacation seasons, they can often remain vacant during off-peak periods. To ensure year-round income, investors can market their property to different target groups. For example, during off-peak times, they could target business travellers, long-term tenants, or people looking for weekend getaways. Offering discounts during slow periods can also attract more tenants.
3. Do regular maintenance and upgrades.
Keeping the holiday home well-maintained and updated is another way to maximise income as a buy-to-let landlord. Regular maintenance prevents minor issues from becoming major, costly problems in the future. Additionally, upgrading the property with modern amenities and aesthetic improvements can increase its appeal to potential tenants, allowing the investor to charge higher rental rates.
4. Invest in effective marketing.
Effective marketing is crucial in attracting potential tenants and maximising occupancy rates. Investors should ensure high-quality photographs and detailed descriptions of the property are available on various booking platforms. They can also leverage social media and other digital marketing strategies to reach a wider audience. In addition, positive reviews from past tenants can significantly boost the property’s reputation and attract more bookings.
5. Outsource property management.
While managing a holiday home by oneself can be profitable, maintenance, handling utility bills, collecting rent, etc, can be time-consuming, particularly if the investor owns multiple properties. By outsourcing property management to a professional lettings company, investors can ensure their property is well-maintained and that tenant concerns are promptly addressed. This allows investors to focus on exploring other properties in the best places to buy a holiday home in the UK, potentially leading to portfolio diversification and increased income over time.
Frequently Asked Questions
Where best to invest in a holiday home?
London, North Wales, Devon, and Cornwall stand out as prime locations for a holiday home, offering excellent amenities, transport links, and potential for capital growth.
Is buying a holiday home a good investment?
Yes, buying a holiday home can be a good investment, offering the potential for considerable returns with the right care and attention. However, it’s not without challenges and requires careful consideration; it’s crucial to approach this investment mindfully.
What are the pitfalls of buying a holiday home?
Buying a holiday home can present certain pitfalls, such as inconsistent income, marketing and management costs, continuous investment for upkeep, and the burden of managing the property. Other issues include dealing with unruly guests, navigating local restrictions, and increasing council and capital gains tax. We recommend investors partner with an experienced wealth manager/advisor to help navigate these challenges.
Conclusion
For those seeking a profitable investment in the UK hospitality market with a strong potential for high returns on investment within the next few years, London, North Wales, and Dorset are some of the best places to buy a holiday home. With major regeneration and infrastructure projects transforming these cities into world-class destinations and attracting both businesses and new residents, property values are set to rise substantially.
The new luxury developments from API Global’s partners in these cities offer an exciting opportunity. For more information, investors should contact their wealth managers or property investment advisors.
Disclaimer: Any information API Global provides does not constitute financial advice and is for educational purposes only.
