The UK is among the five largest markets in Europe for holiday home ownership. While the trend of increasing holiday home ownership among British residents began decades ago, the numbers have risen substantially since 2020 due to prolonged travel restrictions. According to the BBC, vacation rentals in England have increased by over 40 per cent between 2020 and 2023, with no signs of this trend slowing down in 2025.
Some of the most significant increases have been seen in popular holiday destinations such as Scarborough, the Isle of Wight, North Devon, the Cotswolds, and Norfolk. That said, 2024 has also seen growing interest in other areas of the UK market.
While the pandemic undoubtedly opened many Britons’ eyes to the benefits of local holiday home ownership, there are several other key factors driving this trend.
1. Changes in personal finances
Before the pandemic and recent geopolitical upheavals, travelling abroad was affordable for many UK residents. Today, the situation is very different. The cost of living has risen globally, with essentials such as food, rent, and energy becoming significantly more expensive in recent years.
These changes have also impacted air travel, with ticket prices rising by 25 per cent in 2024, as reported by CNBC, with no sign of improvement. Many families are now struggling to make ends meet, let alone afford an expensive trip to an exotic destination.
As a result, more than 52 per cent of Brits chose to holiday in the UK, with only 17 per cent venturing beyond Europe in 2024, according to Consumer Intelligence.
2. Attractive earning potential
When purchasing real estate, regardless of its purpose, earning potential is almost always a key consideration. While the real estate market has seen growth across the board, holiday homes have emerged as particularly lucrative investments.
Income from UK furnished holiday lettings increased by 68 per cent between 2018-2019 and 2022-2023. This substantial rise is not only driven by the increasing popularity of staycations but also by the success of short-term rental platforms such as Airbnb and Booking.com.
Landlords using these platforms have achieved above-market ROIs nationwide, with Cornwall, Edinburgh, and London leading the market. In these areas, average occupancy rates north of 80 per cent are not uncommon.
3. Tax benefits and incentives
While tax laws affecting holiday homes are subject to change, there are still financial incentives for furnished holiday lets (FHLs) in the UK. Perhaps the most significant advantage over buy-to-lets is the ability to deduct the full mortgage interest (Section 24) from FHL profits. This relief has been phased out for residential landlords, who can now only claim basic rate income tax (20 per cent), resulting in lower tax bills and higher retained profits for FHL owners.
Furthermore, holiday home owners are able to claim capital allowances not available for standard buy-to-let properties. For example, refurbishment and upgrade costs, as well as furniture, fixtures, and equipment to create a luxury standard can be offset against income, thus reducing tax liability and boosting profits.
4. Partial home ownership is on the rise
With partial ownership of holiday homes experiencing a boom, a long-established trend in the US is now gaining traction across Europe and in the UK. Companies like MYNE, Europe’s leading co-ownership platform for holiday homes, are democratising access to vacation real estate by allowing buyers to purchase as little as ⅛ of a property.
This model enables UK residents to become co-owners of exclusive holiday homes in some of Europe’s most sought-after destinations, all at a fraction of the cost of full ownership. “Our aim is to establish co-ownership as a modern and sustainable form of holiday home ownership across Europe,” said Nikolaus Thomale, co-founder of MYNE Homes.
Through managed co-ownership, both the purchase price and ongoing costs (such as maintenance and utilities) are shared among the owners. Additionally, vacation rights can be traded with other co-owners, allowing for flexibility to explore different locations without additional investment. The company also handles furnishing, cleaning, and maintenance, providing owners with peace of mind and convenience without the typical hassle of property management.
With a combination of financial benefits, investment potential, and the flexibility offered by new ownership models, it’s no surprise that holiday home ownership is growing in the UK. Whether for personal use, income generation, or as part of a diversified investment strategy, holiday homes represent a compelling opportunity for savvy buyers in 2025.