Renting out a property as a short-term let or holiday home has proved extremely profitable for some property investors, and a combination of changes to buy-to-let tax and the rise of Airbnb and rivals has made it increasingly popular. But where in the UK is the best place to invest?
Vanquis Bank analysed data across 21 of the UK’s biggest cities, calculating the average amount homeowners could make listing their spare room on Airbnb or renting it out permanently.
Out of the 21 cities assessed, Airbnb worked out as the more profitable option in seven of them.
Homeowners in Bath, Belfast, Brighton, Cardiff, Edinburgh, Manchester and Newcastle could make more money listing their spare room on Airbnb one night per week, than if they rented it out full-time.
Cardiff ranked as the most profitable city for Airbnb, with homeowners earning 86% more via Airbnb than traditional renting.
Hosting a room on Airbnb for 52 nights a year in Cardiff would generate approximately £6,344, compared to an average rental income of just £3,408.
Belfast was the second most profitable city for Airbnb, with hosts earning approximately £4,108 on Airbnb - 39% more than the average rental income of £2,964.
Meanwhile, Cambridge came out as the least profitable city for Airbnb. Homeowners could expect to earn just £3,744 per year on Airbnb, 35% less than the average rental income of £5,772.
London came out as the best city for renting, with homeowners able to make £8,126 per year, compared to just £6,084 via Airbnb.