Half of holiday let owners improve profits despite tax changes – Mortgage Strategy
Nearly half of holiday let owners say their profitability has increased since furnished holiday lettings tax breaks were abolished in April 2025, according to research from Cumberland Building Society.
The lender’s inaugural Holiday Let Index found 48% of owners reported higher profits following the tax changes, while 19% said profitability had remained broadly unchanged.
Owners have responded by adjusting their strategy, with 47% increasing nightly rental rates and 46% focusing on boosting occupancy.
The research also points to changing guest behaviour. Half of owners reported an increase in last-minute bookings, while 39% have seen shorter stays and the same proportion said guests had become more price-sensitive.
Cumberland found 86% of holiday let owners were achieving gross rental yields of at least 5%.
It found that 44% reported yields 5-6% and 34% reported yields of 7-8%.
Looking ahead, 61% of owners were positive about future yields, while 30% said they planned to buy another holiday let property within the next 12 months and 25% intended to expand their portfolio.
Cumberland Building Society head of intermediary lending Grant Seaton says: “What I take from these findings is that resilience in the holiday let market is not passive. Owners are having to work for their returns.
“They are looking much more closely at pricing, occupancy, finance costs and how each property is run, rather than assuming demand alone will produce a good result.
“The owners who perform well over the longer term are therefore likely to be those who understand the numbers behind their property and are prepared to adjust when conditions change.”
The research was compiled by Pegasus Insight through a quantitative online survey of 125 respondents, comprising 25 mortgage brokers, 100 property owners.
