The average annual holiday let income exceeded buy-to-let income for the first time in 2020-21, reaching �15,600 compared with �13,400, according to HMRC.
Ten years ago, holiday lets generated about �9,600 a year compared with �12,800 for buy-to-let but the gulf has grown wider, pushing holiday let income up by an average of 63% in the past decade compared with just 5% for buy-to-let.
A Freedom of Information request by Hamptons reveals that 63,000 individuals (rather than a company) received income from 65,000 furnished holiday let properties in the UK according to the latest available data '� up from 46,000 receiving income from 50,000 properties in 2011-12.
It also wanted to test the theory that some longer-term landlords had moved across to the short-let market because it was more lucrative. The results show that while some have, the numbers are still fairly small - just 1.5% of all landlords are also holiday let owners, up from about 1.3%.
However, the figures will no doubt fuel critics' argument that investing in holiday properties is driving up prices in rural hotspots and creating a chronic shortage of rental properties. Six mostly Labour MPs are sponsoring an Early Day Motion that would establish a Short Term Holiday Let Licensing Scheme across England.
For a property to qualify as a self-catered holiday let in England - let for at least 70 nights a year and available for at least 140 '� owners can switch from paying council tax to business rates. However, if their annual business rates bill is less than �12,000 and they only rent out one property, they pay no tax.
David Fell, a senior analyst at Hamptons, says the number investing in holiday lets rose dramatically during the pandemic because so many more people were confined to staycations as a result of international travel restrictions. 'While Covid undoubtedly distorted the market, the longer term upward trend in revenue predates Covid, and it's a trend the government has been increasingly worried about,'� he adds.