The Intermediary – September 2026 - Flipbook - Page 24
BUY-TO-LET
In focus
Holiday lets: A
credible alternative
F
or some time now,
there’s been a consistent
view that demand for
holiday let finance had
peaked, with holiday lets
becoming less aractive
for investors.
The Furnished Holiday Let tax
changes removed incentives investors
had become accustomed to, while
compliance requirements increased,
local authorities became more
interested in regulation, and operating
costs continued to rise.
The combined effect of these
factors pointed to a clear outcome:
demand was expected to cool,
investors would begin to turn their
aention elsewhere, and the market’s
momentum would gradually ease.
However, that’s not been the case.
Research from The Cumberland’s
inaugural Holiday Let Index, which
brings together the views of mortgage
brokers, landlords and holiday let
owners, found that 88% of brokers
have seen holiday let mortgage
number of landlords are taking a
fresh look at how different property
investments fit within their broader
plans. One of the more curious quirks
of the property market is the habit of
pitching holiday lets and buy-to-let
(BTL) as rival camps, as if investors
spend their evenings swearing loyalty
to one side or the other. In reality,
most are taking a far more pragmatic
view, focusing on how to build a
balanced, diversified portfolio rather
than choosing a single path.
Balanced books
Holiday lets should not be viewed as a
replacement for traditional buy-to-let,
but as a different type of investment
with different characteristics. A
city-centre flat with strong long-term
tenant demand offers one proposition,
while a coage in the Lake District,
a property overlooking the Cornish
coast or a home in another established
tourism destination offers another.
They serve different markets, meet
different investor objectives and, for
Time in the sun: Higher yields are still drawing investors to the holiday let market
enquiries increase over the past 12
months, with almost a third reporting
a significant increase. The full
Cumberland Holiday Let Index will be
published later this year.
More importantly, this statistic is
not an outlier within the research,
which also found that higher yields
are the primary reason investors are
entering this market, while a growing
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The Intermediary | September 2026
many landlords, can sit comfortably
alongside one another within the
same portfolio.
This diversity extends beyond
location. Holiday lets can potentially
generate stronger income in the right
circumstances, but they also come
with greater operational demands,
greater seasonality and a stronger
reliance on local tourism markets.
KEVIN AITKEN
is senior sales manager
at The Cumberland
Traditional BTL may provide a
steadier income stream, but it brings
its own considerations and challenges.
As a result, the question many
investors are asking is not which
model is universally beer. It is which
one makes the most sense for the
property siing in front of them.
This is a particularly relevant
consideration given how much the
market has changed over recent years.
The abolition of mortgage interest
relief and wider reforms across the
private rented sector (PRS), including
the Renters’ Rights Act, have all added
further considerations for landlords
assessing future opportunities.
Against that backdrop, it is
hardly surprising that investors are
taking a broader view of the options
available to them.
The borrowers entering the
market today oen look different
from those who arrived during the
‘staycation’ boom. They tend to be
more experienced, more measured
and, perhaps unsurprisingly, more
interested in long-term returns than
quick wins.
Holiday lets are not the right
choice for every investor, nor do they
diminish the role of traditional buyto-let. They have, however, become an
established part of the wider property
investment landscape, offering a
different balance of risk and reward
that many investors continue to
find aractive.
As further findings from the
Holiday Let Index emerge over the
coming months, it will be interesting
to see not only where demand
is coming from, but what those
changing paerns tell us about the
future direction of the market itself. ●
