More growth predicted for the UK’s holiday accommodation sector

More growth predicted for the UK’s holiday accommodation sector

9:39 AM, 2nd August 2023, About 9 months ago 3

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The UK’s holiday accommodation sector is poised for continued growth this year and offers savvy property investors an opportunity, one property development firm says.

Research from Stripe Property Group shows that despite experiencing a setback due to the pandemic in 2021 which saw the market decline by 24%, the sector bounced back with a 21% growth rate in 2022.

This resurgence, the firm says, will pave the way for further expansion in 2023.

It adds that the market size stands at £2.54 billion, that is a 38% increase from £1.8 billion in 2013.

‘UK holiday accommodation sector was hit hard’

James Forrester, the managing director of Stripe, said: “While staycations boomed in popularity during the pandemic, and continue to do so, the UK holiday accommodation sector was hit hard by the restrictions imposed on travel, not to mention every other area of life.

“However, the sector has shown promising signs of a return to form and this growth is expected to continue this year.

“It should certainly be a consideration for those looking to invest within the property market who might not wish to follow the traditional path of a residential development.”

He adds: “Whether it’s holiday accommodation, purpose-built student accommodation or a commercial venture, there is a vast array of opportunities within the market for savvy investors who wish to diversify their portfolio.”

More impressive without the impact of the pandemic

Unfortunately, the research also shows that the market’s growth trajectory would have been even more impressive without the impact of the pandemic on the tourism and travel sector.

In 2021, the market size of the UK holiday accommodation sector saw a huge 24% reduction, marking only the second annual decrease in the last 10 years.

Consequently, the total market size plummeted from its peak of £2.76 billion in 2020 to less than £2.1 billion in 2021.

However, the sector has regained momentum by rebounding last year by 21% to £2.5 billion.

The research shows the sector is expected to continue its growth with an estimated 4% expansion.

However, despite this positive outlook, the projected market size of £2.6 billion will remain approximately 4% below the pre-pandemic peak.


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Comments

NewYorkie

10:17 AM, 2nd August 2023, About 9 months ago

I bought a 4-bed house in 2020 with the intention of holiday letting [had it with BTL!]. I extended up and out, and fully refurbished with that in mind. I have since changed my mind and sold up [above guide price] last week.

York is a big tourist destination, and my street alone is becoming dominated by holiday accommodation. But, while it remains financially viable, there will come a time when this or definitely a Labour government will realise just how low this fruit is hanging, and remove it's lucrative taxation benefits. The Tories did it to BTL. I've never understood why not holiday letting?

Dylan Morris

12:45 PM, 2nd August 2023, About 9 months ago

I think holiday lets are a great way to go, so is serviced accommodation, future demand is going to be huge. All the hotels are getting full to the brim with “long term residents”.

John

9:48 AM, 3rd August 2023, About 9 months ago

I’m in York and our labour MP has a mission on lowering holiday let’s in York. 2000 odd homes are being used for this purpose and she doesn’t like it.

I spoke to her about the impacts of EPC’s and told her she would personally be affected by them in the 2930’s. Straight over her head. She has a simple vote winning agenda which she is only concerned about.

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