According to Sykes Holiday Cottages’ Holiday Letting Outlook report for 2026, the average gross income from a one-bed property came to £16,800, going up to £21,000 for two-bed homes and £25,600 for three-bed properties.
For a four-bed home, the average gross income stood at £36,000, whereas five-bed properties came to £48,200.
Looking at the highest earning regions, the Cotswolds took the top spot with £30,600, while Cumbria and the Lake District came second with £28,400 and then the Highlands and Islands followed with £28,000.
When asked about the average annual costs and expenditure of a holiday let owner, bills came to £2,140, changeover costs stood at £1,190, property maintenance came to £1,580, tax or licensing fees stood at £1,450 and marketing came to £1,000.
Owners said the changes to the sector that were worrying them the most were rising operational costs, the rising cost of living impacting tourists, higher council taxes, the statutory licensing scheme and a tourism levy.
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Around 37% of owners said they were future-proofing their lets by making their property available for more days to increase income, and the same share cited investing in improvements to their holiday let.
Approximately 27% said they were looking to switch energy suppliers or installing energy-saving tech.
Nearly a quarter said they were turning to agencies or platforms to drive more bookings, and the same proportion cited registering their holiday let for business rates.
The top motivation for holiday letting was investment for future finances, followed by generating income during retirement and to share where they live with others and encourage more visitors to the area.
Ben Spier, head of regulation and policy at Sykes Holiday Cottages, said: “It’s impossible to ignore that the nation’s holiday let owners have faced some hurdles in recent years, but UK holiday lets still command high occupancy and competitive weekly rates. Through expert guidance and proven income-boosting strategies, owners can unlock the full potential of their holiday let investment.
“New council tax premiums have probably received the most attention in the media, which might be why our research found this to be causing a lot of worry among owners. However, these are intended for second homes rather than holiday lets, because the former contribute far less to local tourist economies.
“So, most of our holiday let owners have not been affected by this change as they qualify for business rates. By law, a property is eligible to pay business rates if it meets a certain threshold of days let and available.”
