Tax For Furnished Holiday Lets | Expert Advice
As of 6th April 2025, the Furnished Holiday Let tax scheme has ended. However, there are still some aspects...
by Janine de Lange / Owner
Whether you’re considering running a holiday let business or are an experienced owner, understanding and managing the practicalities involved is the key to your success. While it may seem challenging and complex to start with, running a holiday let business can be a lot more straight-forward with first hand advice.
Drawing on years of experience as a leading holiday letting agency in Cornwall, we’ve compiled this comprehensive guide. It will take you through every stage of setting up and running a successful and profitable holiday let business.
Use the quick links below to learn about a specific topic, or read on for our comprehensive guide to running a holiday let:
Yes, holiday lets are a good investment, provided you give them the right consideration. Understanding the market and other influencing factors can make running a holiday let a very profitable venture.
There are several benefits to running a holiday let business, including the opportunity to make a good income. Something that sets holiday letting apart from other investments is that there are lifestyle benefits as well as financial ones.
According to a recent survey carried out by our parent company, Sykes Cottages, the top three motivating factors for running a holiday let are:
Below we’ve listed some of the biggest advantages of running a holiday let business. For further insight into whether a holiday let is a good investment, read our blog on thinking of buying a holiday home in Cornwall.
The UK self-catering market continues to see high demand.
In 2024, our bookings per property increased by 1.6% and revenue per property increased by 1.4% compared to 2023, driven by an increase in customers making multiple short break bookings.
Our parent company, Sykes Holiday Cottages, saw the busiest Easter to date in 2024, with bookings up 11% and an average income per owner of £3,200 during the school holiday period. Read their 2024 Holiday Letting Outlook Report to learn more. For local stats about the Cornish holiday letting market, read our Holiday Letting Market Insights Report.
A main advantage of running a holiday let business is that it can provide a strong income, and if done correctly, generate a steady cashflow for years ahead.
The 2024 Holiday Let Outlook Report showed that holiday let owners earned an extra £500 a year in 2023, with an average income of £24,500. Cornwall was the area with the 4th largest average income, at £26,500 per year.
At Cornish Cottage Holidays, we can provide you with a free no-obligation income forecast, so you can see for yourself what you could earn from running a holiday let business.
For many, buying a holiday home is a chance to fulfil the dream of having somewhere to stay themselves, when they need a break from the hustle and bustle of life.
The added bonus is that you can rent it out when you’re not there to generate an income. This offsets the cost and often provides you with a little extra to invest somewhere else.
When buying a holiday let, there are several things you need to consider. Here’s our list of the top 4 considerations you need to make:
One of the most important decisions for your holiday let business is choosing a location. Running a holiday let in an area that suits both you and your guests is a major factor in how successful it will be. We believe you should always choose a location that you would holiday in yourself.
According to the Sykes Staycation Index 2024, Cornwall was the number 1 most popular staycation destination this year. In the same report, beachfront and cottage-style holiday homes both featured in the 5 most popular property types to stay in.
If you are considering buying an investment property in Cornwall, read our blog on the best places to buy a holiday home in Cornwall to help narrow down your search.
Identifying your target market is key to running a successful holiday let business.
Think about who your property is best suited to and who your ideal guest would be. If yours is a cosy bolthole with one bedroom, it’s perfect for couples as a romantic getaway. If you have a large property, then your target market is likely to be families or bigger groups.
As with any venture, you’ll want to make sure your finances are in order. You should consider what the best way to finance your holiday let business is, and ensure the option you choose is right for you.
When buying a holiday home, many owners won’t be able to purchase a property outright and will need to apply for specialised financing in the form of a holiday let mortgage. Read our blog on Holiday let Mortgages for more info.
Running a holiday let business also requires a reasonable amount of capital to furnish, decorate and cover the costs of any upgrades. You will also need to consider the day-to-day running costs associated with your holiday let. For more information on holiday let costs, read our guide.
According to Sykes, the average annual income of a holiday let was £24,500 in 2023, while the average annual income for Cornish properties was £26,500. However, your earnings will depend on factors such as your holiday let’s size, availability, location, and occupancy levels.
A forecast of your holiday home’s potential income is a vital step towards running a successful holiday let. The team at Cornish Cottage Holidays are on hand to provide a free booking and income proposal for your property, using our vast amount of data on what similar properties in the area have achieved.
We can give you an income proposal either by visiting your property, or using an online listing for a property you’re thinking of buying. Register on our Let your Cottage page to book yours now!
In a highly competitive market, it’s important to make sure your holiday let stands out. Here are several additional factors that can make running a holiday let business successful:
It may not come as a surprise that certain features are extremely appealing in a holiday home. The 2024 Holiday Letting Outlook Report shows that the top three for boosting potential income are:
In 2023, holiday lets with hot tubs earned an average of 37% more revenue. Not only will a hot tub attract more bookings, but you can also increase your rental rate to help offset the costs, making it a worthwhile investment.
With social media and online streaming services a big part of our lives, and ‘working from holiday’ becoming more popular, it’s easy to understand why 27% of Brits consider Wi-Fi a priority for their holiday accommodation. Having a Wi-Fi connection increases your holiday let business’ income potential by 55%.
More and more people are choosing to take their pets on holiday with them. Choosing to make your holiday home pet-friendly is a simple way to open it up to a wider audience, and could boost your income potential by around 15%.
The key to great booking levels and a positive return on your investment is to ensure your property receives as much exposure as possible. At Cornish Cottage Holidays, we use a range of marketing channels to bring your property the best possible exposure.
As part of Sykes Holiday Cottages, Cornish Cottage Holidays has access to both national and local marketing. We have an annual marketing budget of £35 million and dominate Google search results, with a 30% market share amongst the four largest competitors in the industry.
Nowadays, the ‘shopfronts’ where potential guests will see your property are your online property listings. You should ensure that your property is listed on multiple platforms, so holidaymakers can find it quickly and easily.
All the properties we manage are listed on both the Cornish Cottage Holidays and Sykes Cottages websites, giving your holiday let double exposure. We also work alongside 700 other partner sites such as Booking.com, Airbnb, and Snaptrip, ensuring our owner’s properties are seen in as many places as possible to maximise bookings and earnings.
It’s also important to ensure your property is visible in the areas you operate, so that holidaymakers who already have a preference for your area know your holiday let is available.
Cornish Cottage Holidays have a local marketing team in Cornwall, attending events like the Royal Cornwall Show. We also regularly advertise in local publications, tourism information centres and with signage around Cornwall.
Learn more about how best to advertise and market your property in our comprehensive guide.
Knowing what to charge for your property is an important element of your holiday lets’ success. As an owner, you need to know that costs are covered whilst still making a profit.
At Cornish Cottage Holidays, our revenue management systems allow us to compare the pricing for all our current properties. It takes into consideration their features and booking performance, to ensure we are setting realistic and achievable prices.
We have our own optional dynamic pricing tools, which proactively adjust prices in line with demand. This means that when there is high demand for a particular date or area, prices will increase to maximise your income. In periods of low demand, prices can decrease to secure bookings (but never below a base rate which we agree with you).
Using our income maximisation pricing is optional, but we find that across the year, this can generate over 12% more income for our owners.
Read our blog to find out more about how to price your holiday let and maximise your earning potential.
Designing your holiday home’s interior in the right way is a vital part of running a holiday let business.
Selecting the right layout and furnishings determines the look and feel of a holiday cottage and is a key factor that will influence guests when booking their holiday. Creating a stylish, inviting, yet functional interior is vitally important.
Most guests expect not only a comfortable property, but one that is well-resourced. We sat down with Cornish interior design agency, Studio Far West, to hear their top tips on holiday home interior design – read our blog to find out what they suggested.
Running a successful holiday let business has different legislation to renting out domestic residential properties. You can read the details in our guide to holiday let legal requirements, but here are a few things to bear in mind.
Planning permission may be required if you’re starting a new business, converting, or extending your property. If any of these apply, you will need to apply for a ‘change of use’ for your property.
For more information, read the official government guide to planning permission or visit the planning portal to find out whether you’ll need an application.
As an owner, you have the responsibility to ensure you’re protecting your property as well as any guests should anything happen. You’ll need to get a specialist policy that will cover a multitude of elements that regular home insurance won’t.
Holiday let insurance includes buildings and contents cover, as well as loss of potential income. Although not a legal requirement, having public liability insurance cover of £2 million is also an advisable requirement for running a holiday let business.
There are a few taxes you’ll need to consider when running a holiday let business.
Furnished Holiday Lets currently have a unique standing with taxation, and therefore gain from certain benefits and allowances. If your property meets the qualifying criteria, you could be entitled to tax relief and make significant savings for your business.
However, this regime is being removed from 1st April 2025, so there will be some changes to holiday let tax. Visit the Government website for more information on this.
There are also Council Tax and Stamp Duty to consider when running a holiday let. Read our holiday let tax guide to check you’re on the right track.
A crucial element to consider when running a holiday let is to uphold a good level of health and safety.
When letting out your property, you have a duty of care to your guests to provide safe accommodation. You need to do your best to minimise the risk from potential hazards. By ensuring your holiday property is safe, both you and your guests can relax in the knowledge that potential risks have been minimised.
Our full guide to holiday let legal requirements has more detail on health and safety regulations. For info on holiday let fire regulations, read our blog.
There is a lot involved in the day-to-day running of a holiday let, from preparing your home for guest arrival to regular maintenance. Here are some of the main things involved in running a holiday let business.
The day-to-day administration and booking management, along with customer communication, is an important part of letting your holiday home, but can be time-consuming.
Your guests will need vital information to plan their trip and details on where your property is, as well as details on parking and key collection.
Cornish Cottage Holidays can help with this part of running your holiday let business. Whether a guest is enquiring about property details, making a payment, or has a query about their holiday, our team will be their point of contact. We’ll take care of all the finer details, so you don’t have to.
Providing a comprehensive guest information folder is a great way to welcome your guests and help them settle in.
You could also choose to provide a small hamper of delicious local goodies to really make them feel welcome. Going the extra mile for your guests encourages them to leave positive feedback, which helps with new and repeat bookings.
Read our blog about holiday home welcome packs for more tips.
An integral part of running your holiday cottage is managing changeovers between bookings. This will include general housekeeping and cleaning, providing freshly laundered linen and towels, and property checks.
This is where a managed service can be beneficial to running your holiday let. At Cornish Cottage Holidays, we can provide you with a premium service to give you complete peace of mind and ensure your property is ready for guests.
Working directly with our suppliers, our Managed Services team can organise and conduct a range of services, including cleaning and changeovers.
As with any property, a holiday cottage requires regular maintenance to uphold standards and encourage repeat bookings.
Most of the time, you can avoid any serious issues simply by following a regular maintenance schedule. However, there will sometimes be jobs and ad hoc repairs that are a bit more complex and would benefit from planning, comprehensive advice and qualified tradesmen.
Our Managed Services team can assist owners with organising holiday home maintenance, using our large network of reliable suppliers.
Using a holiday letting agency can make running your holiday let business a breeze. Finding the right holiday letting agency in Cornwall, for expert advice and support, will make all the difference to your holiday let’s success. For advice on choosing the right agency, read our blog on choosing a holiday letting agency in Cornwall.
With 50 years of local holiday letting experience and over 800 self-catering cottages throughout Cornwall, Cornish Cottage Holidays have the expertise to help you run your holiday letting business.
We want letting your holiday home to be as enjoyable and as effortless as possible for you. That’s why we’ve created some helpful guides to answer any queries you may have. Simply visit our Owner Advice Page to find out more.
For more holiday letting advice, request your FREE Owner Guide or give us a call on 01326 573808 today.
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by Janine de Lange / Owner
I’ve had the privilege of living in the beautiful South West since 2010, and in my opinion there’s no better place in the worl...
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