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Is the staycation-fuelled holiday lets bubble bursting?

holiday lets

Holiday let owners are facing a significant dip in bookings this year as the sector feels the effects of the cost-of-living crisis, poor weather and an increasingly saturated market.

Data supplied from AirDNA, which tracks listings on rental sites Airbnb and Vrbo, found 342,000 short-term lets available in the UK in the 12 months to February, up 19% on the previous year. New listings for homes jumped 22% year-on-year in 2023, while new apartment listings increased by 16%, The Guardian reports.

Many landlords have switched from long-stay to short-stay operations, particularly during and after the pandemic when Brits opted for a staycation, but some are questioning whether this was the right decision.

Alongside a drop in bookings, they now face the end of tax relief from April 2025, which was announced in last month’s budget, as well as a new mandatory national registration scheme. Landlords must also seek planning permission to convert properties into short lets.

Yvonne Turnbull, from Horsham, has been letting out a three-bedroom apartment in Scarborough for between £150 and £175 a night, for the past six years.

She tells The Guardian that demand is significantly down on previous years, with no bookings for January, February or March, including half-term, and fewer bookings over Easter. Turnbull said Scarborough was now oversupplied with holiday lets. “When we started there were about 200 Airbnbs in the town. Now you’re looking at 1,000.”

Scots threat

Holiday lets landlords also face hostile politicians in the UK. Over the weekend Patrick Harvie, Scotland's tenants' rights minister, said short-let holiday rentals were "harmful to society", adding that the regulation of short-term lets was necessary because it was “about recognising that homes should be homes”.

He added: “That's their fundamental purpose – it’s for people to make a home and to make a life in them. Anything that results in houses being taken out of that fundamental purpose is harmful to society.”

The Scottish Government recently introduced its Housing (Scotland) Bill which, among many proposals, will see rent controls in the country made permanent as well as regulating the short-lets sector.


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