A new analysis by a lending company has revealed the average rent secured on a holiday let in 21 areas of the UK, the cost of investing in such a property and the yield available. 

The research shows that on average, a UK holiday let will pull in a monthly rental income of £972. 

However, at an average of £353,015, the initial cost of investing in a holiday let home is over £30,000 higher than the average buy to let rental property. Despite this higher initial cost, the current average yield of a holiday home sits at 3.3 per cent, 0.5 per cent more than the average BTL. 

Worthing in Sussex is home to the highest holiday let rental price premiums, where the average rental income of £1,530 per month is 72.3 per cent higher than a regular rental property in the same postcode area.

Porthcawl in South Wales also ranks high with holiday let rental price premium of 70.5 per cent, followed by Llandudno in North Wales (65.6 per cent), Bakewell in the Peak District (44.8 per cent) and Southsea in Hampshire (44.3 per cent). 

When looking at the difference in the average rental yield available, Llandudno trumps Worthing, with the average holiday let rental yield of 4.4 per cent coming in 1.6 per cent higher than the regular long term rental market. 

However in Exeter, the average holiday let yield of 5.3 per cent is actually 1.0 per cent lower than the wider rental market.

The analysis was done by Revolution Brokers and founder Almas Uddin says: “With the government waging war on the buy-to-let sector it’s hardly surprising that more and more investors are looking to the holiday let space. While a holiday let may set you back more initially, the available rental income tends to carry a substantial premium versus your average rental home. 

“But as with any investment, you can’t just assume that this will be the case and location is essentially the most vital aspect when looking to invest in a holiday let rental home. As our research demonstrates, not every area will return the same increased yield when compared to the regular rental market and, in some cases, the far higher cost of investing may even return a lower yield. 

“It’s a fine balancing act, as you need an area with robust and consistent demand for holiday rental homes, but one that hasn’t already seen property prices rocket due to this high demand.”