The Intermediary – November 2025 - Flipbook - Page 68
BUY-TO-LET
Opinion
Busting holiday let
myths to unlock
real value
H
oliday lets have had
a knack for making
headlines over
the past couple of
years. Sometimes,
they’re blamed
for hollowing out communities;
alternatively, they are celebrated as
the golden ticket to landlord riches.
The truth, as is oen the case, lies
somewhere in between. This is a
market which is far more interesting,
and multifaceted, than the stereotypes
might suggest.
According to analysis of this sector
by The Professional Association of
Self-Caterers (PASC UK), holiday lets
still make up just 0.6% of the UK’s
total housing stock, yet they generate
a remarkable £6.6bn in economic
value and support 139,000 jobs. That
represents a huge economic punch
for such a small slice of the market,
and it underlines why brokers should
be paying aention to a sector that is
oen misunderstood and packed
with opportunity.
One of the most persistent myths
tackled in the PASC UK report is
that holiday lets are displacing
large numbers of homes from local
residents. It highlights that fewer
than one in 200 homes fall into this
category. Even when looking at the
100 most popular rural and coastal
constituencies for holiday lets in
England in 2023, Frontier Economics
estimates that only 2.4% of all
dwellings in these popular areas were
dedicated holiday lets.
Furthermore, in the PASC survey,
business owners confirmed that 43%
of their properties across England
and Wales can only be used as holiday
lets due to planning restrictions.
This further reduces the number and
proportion of holiday lets that could
potentially be used as a primary home.
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The Intermediary | November 2025
Another misconception is that
holiday lets only aract affluent
investors. In practice, landlords come
from a wide spectrum, from families
converting inherited properties to
professional landlords diversifying
their portfolios.
With domestic travel increasing in
popularity, holiday lets also underpin
a more sustainable shi towards
lower-carbon, UK-based tourism,
reducing reliance on international
flights while supporting rural and
coastal communities where alternative
economic drivers may be scarce.
In terms of demand, this has largely
remained resilient despite wider
uncertainty across the buy-to-let (BTL)
market. Staycations continue to be a
lifestyle choice for many households,
not just a pandemic trend. For
landlords, this translates into healthy
occupancy levels and competitive
yields. For brokers, it presents an
opportunity to guide clients towards
a sector that balances strong returns
with long-term resilience.
Specialist expertise matters
As with any specialist asset class,
successful outcomes depend on lender
understanding. Holiday lets differ
from standard buy-to-let in several
respects: income streams fluctuate
seasonally, valuations require
experienced surveyors, and location is
oen key to long-term viability.
Recognising the specific
characteristics of holiday let lending,
specialist lenders are increasingly
offering a dedicated range of products
and criteria designed to reflect real
market conditions. For example, we
allow rental income from holiday
lets to be included in affordability
assessments, rather than relying
solely on standard assured shorthold
tenancy assumptions.
GRANT HENDRY
is director of sales at
Foundation Home Loans
This ensures a more accurate
reflection of achievable income,
supporting landlords to access
funding that matches the property’s
true potential.
By enabling holiday let income
to form part of the affordability
calculation, brokers can help clients
maximise borrowing power while
ensuring stress tests remain robust.
Positioning for growth
Looking ahead, despite only
representing 0.6% of UK homes,
the contribution of holiday lets is
disproportionately powerful, and
they are primed to play a bigger role in
landlord portfolios. Strong domestic
tourism, robust demand, higher
than average yields and the appeal of
diversified income streams all point to
their continued relevance.
Beyond the financial case, the sector
may also deliver wider benefit than it
is credited for, from supporting local
economies and jobs to encouraging
lower-carbon travel – giving landlords
a chance to align investments with
positive social impact.
For brokers, this creates a dual
opportunity: to help clients secure
profitable returns while championing
a sector that is adding value well
beyond property yields.
By working with lenders with a
real understanding of this sector
and presenting the evidence clearly,
brokers can counter misconceptions
and position landlords to grow their
portfolios with confidence and clarity
in an ever-maturing corner of the buyto-let market. ●
