For landlords weighing up where to put their next investment, it is possible for a holiday let to deliver a markedly stronger return than a standard buy to let, because letting by the night at seasonal rates can lift gross income well beyond a conventional annual tenancy.

However, that stronger headline yield is rarely the whole story, since it holds only when the property earns consistently across the year. That consistency is built through how carefully the let is presented, marketed and run, rather than how well it performs in a single peak season. Yield in this market is won in the quieter months, and the features that fill those weeks tend to be the same ones that make the financing easier to secure.

Since April 2025, the furnished holiday lettings regime was abolished, meaning holiday lets are now taxed as ordinary property income. For landlords, this means some of the previous tax advantages have been removed. Mortgage interest is now only relievable at the basic rate, capital allowances on new spending have been withdrawn, and profits no longer count towards pension contributions.

None of that means holiday lets are no longer attractive, but it does mean landlords need to look beyond the nightly rate and ask what they are likely to keep across the full year, once tax, costs, management and quieter months have all been factored in. Investors should take professional tax advice before committing.

The best-performing holiday lets are actively managed
The properties that earn consistently are the ones that are actively managed, not simply put on a listing site and left to fill themselves.