88% of brokers have reported an increase in holiday let enquiries, with 32% seeing a significant rise, new research from The Cumberland shows.
The Society has launched its inaugural Holiday Let Index, bringing together research from brokers, landlords and homeowners.
When asked what they wanted to see most from holiday let lenders, brokers pointed to income assessments based on short-term rental performance, easier switching between holiday lets and long-term residential lettings, more realistic affordability assessments, faster underwriting, higher LTV options, and more flexible fixed rate periods.
The research shows that higher yields compared with standard buy-to-let remain the leading reason investors are entering the sector, while regulatory changes affecting buy-to-let are also influencing demand. Over 86% of respondents achieve gross yields above 5%, maintaining attractiveness despite market shifts.
More experienced, cautious investors now dominate, with increased use of limited companies and emphasis on steady income. The sector is also becoming more professional, with investors prioritizing long-term gains over rapid growth. Investors remain optimistic about yields and capital growth, with 25% planning to expand portfolios.
For some investors, holiday lets now represent a distinct investment route rather than a simple extension of buy-to-let.
Brokers also remain positive about the long-term outlook, with 44% saying they are very confident in the long-term viability of the holiday let sector. However, brokers also identified clear areas of concern. The removal of furnished holiday let tax advantages is seen as the biggest deterrent for new investors, followed by council tax rises and second home premiums.
Grant Seaton, head of intermediary lending at The Cumberland Building Society, said: “Given everything the holiday let sector has experienced over the past few years, it would have been easy to surmise that investor confidence had fallen sharply. What our research actually revealed was a much more nuanced picture, with several findings that challenged some of the assumptions surrounding the market. That’s exactly why we wanted to produce the Holiday Let Index.
“We wanted to hear directly from the people who know the market best. By bringing together the views of brokers, landlords and homeowners, we’ve been able to build a clearer picture of what’s happening across the sector today, how recent changes are shaping decisions and where opportunities continue to exist.
“As a mutual, listening has always been an important part of how we work. Every conversation with a broker or borrower helps us better understand the market and the people we support, and this research is another extension of that approach.
“We hope our inaugural Holiday Let Index becomes a valuable point of reference for brokers, investors and anyone with an interest in the holiday let market. More importantly, we hope it encourages further discussion about where the holiday let market goes next.”
