Landlords looking to get into holiday let should consider investing in the seaside town of Worthing in Sussex, according to analysis from Revolution Brokers.
In the town investors can expect an average rental income of £1,530 per month, which is 72.3% higher than for a regular rental property.
Porthcawl in the South or Wales also ranks high with holiday let rental price premium of 70.5%, followed by Llandudno in North Wales (65.6%), Bakewell in the Peak District (44.8%) and Southsea in Hampshire (44.3%).
Almas Uddin, founding director of Revolution Brokers, said: “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.”
The research shows that on average, a UK holiday let will pull in a monthly rental income of £972, a 29.4% premium when compared to a regular rental home.
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 rental property.
Despite this higher initial cost, the current average yield of a holiday home sits at 3.3%, 0.5% more than the average of 2.8% for a property within the traditional rental sector.