How to Start a Holiday Let in the UK (2026 Guide)

Quick answer: To start a holiday let in the UK in 2026 you need to: choose the right property and location, check whether you need planning permission (a new use class has been proposed but is not yet law, and London has a 90-night cap), check the registration or licensing rules for your nation (mandatory in Scotland now, coming but not yet live in England), sort the right insurance and safety compliance, understand the tax position (the Furnished Holiday Lettings regime was abolished in April 2025, so holiday lets are now taxed like standard rental property), set up your booking and pricing, and kit the property out to compete. This guide walks through each step, including a few things that changed recently and trip up new owners.

Starting a holiday let can be a rewarding way to earn from a second property or an investment purchase, but the rules around it have shifted noticeably in the last two years, and a lot of the advice still floating around online describes a tax and planning landscape that no longer exists. This guide covers what's actually involved in 2026, in the order you'd tackle it.

Step 1: Property and location

The foundation of a successful holiday let is the property and where it is. The strongest-performing lets tend to be in established tourist areas (the Lake District, Cornwall, the Cotswolds, coastal Scotland and Wales), near a clear draw (a beach, a national park, a city worth visiting), and with a feature that makes the listing stand out in photos.

Be realistic about the market as you plan. After the staycation boom of recent years, supply is up (industry data put active UK short-term rental listings at a record level of roughly 375,000 by early 2026) and demand has flattened, with booked nights slightly down year on year, so margins are tighter than they were and the market has become more professionalised. Research comparable listings in your target area honestly: what they charge, how booked they look, and what they offer. A property that's merely average in a saturated area is harder work than a distinctive one in a spot with genuine year-round appeal.

As a rough benchmark for what properties earn, Sykes Holiday Cottages' 2026 Outlook Report put the average UK holiday let gross income at around £25,600, scaling with size: roughly £16,800 for a one-bed, £21,000 for a two-bed, £25,600 for a three-bed, £36,000 for a four-bed and £48,200 for a five-bed (gross, before costs). Top-performing locations earn well above that, with the report naming Lake District and Cotswolds villages among the highest. Treat these as gross averages, not a forecast for your specific property, and always model your own numbers against local comparables.

Step 2: Planning permission and the new use class

This is one of the areas in flux, so don't rely on older guidance that states it as settled, and equally don't assume the rules are already in force.

The government has consulted on a new planning use class for short-term lets in England, to separate them from standard residential dwellings (use class C3). The widely-discussed version is "C5," though later parliamentary drafting has floated "C7" instead, and as things stand no statutory instrument introducing it has actually been laid, so it is proposed rather than law. The intended effect, if and when it lands, is that converting a property to a dedicated short-term let could require planning permission in some areas, with local authorities in tourist hotspots getting powers (via Article 4 directions) to manage numbers. Existing lets are expected to be passported into the new class automatically.

What this means in practice for someone starting out now: the use-class regime hasn't changed yet, but it is on the way, and the direction is towards more planning control over short-term lets, not less. Check with your local planning authority before you commit, especially if you're buying specifically to let in a high-pressure tourist area, and bear in mind London already has a 90-night annual cap on whole-property short-term lets without planning permission.

If you're building, converting outbuildings, or making external changes, normal planning and building-regulations rules apply on top regardless. For the full picture of planning, registration and licensing across all four UK nations, see our dedicated guide to holiday let rules and regulations in 2026.

Step 3: Registration and licensing

The rules here differ sharply by UK nation, and England's are still settling, so this is worth checking carefully for your specific location.

England is set to introduce a mandatory national registration scheme for short-term lets, under which every let would need a registration number, with platforms like Airbnb required to display it and barred from listing unregistered properties. Registration is expected to require confirmation of fire, gas and insurance compliance, and the consultation response proposed civil penalties of up to £5,000 for operating without it. The important caveat: it is confirmed in principle but not yet live. The target go-live has repeatedly slipped (originally 2024, then Spring 2026, now "later in 2026"), and the enabling legislation hasn't been enacted at the time of writing, with some indication of an initial voluntary phase. So treat any specific date as a target, not a certainty, and watch GOV.UK for the actual launch.

Scotland is further ahead: it has operated a mandatory short-term let licensing scheme since October 2022, and all hosts must hold a licence from their local authority, with conditions on safety, insurance and occupancy. Enforcement has been active, particularly in Edinburgh and the Highlands. Wales is rolling out its own registration and licensing framework. Northern Ireland requires tourism certification.

The practical point: check the current registration or licensing requirement for the nation and local authority your property sits in before you start letting, because in Scotland in particular, operating without the required licence is already an offence. This is a fast-moving area that older guides get wrong, so verify the live position rather than relying on any single article (including this one).

Step 4: Insurance and safety compliance

A holiday let needs specialist insurance, not standard home insurance, which won't cover commercial letting. You'll want public liability cover (for guests injured on the property), buildings and contents cover appropriate to letting, and often loss-of-income cover.

On safety, you're responsible for guests' wellbeing. Some of the following are strict legal requirements and some are strongly recommended best practice, and the distinction matters:

• A written fire risk assessment is a legal requirement under the Regulatory Reform (Fire Safety) Order 2005, and the requirement for it to be documented was tightened from October 2023. For a smaller property (broadly, under four bedrooms, no more than two floors and no complex open-plan layout) you may be able to complete it yourself using PASC templates; larger or more complex properties really need a professional assessor.
• An annual Gas Safety certificate (CP12) from a Gas Safe registered engineer is a legal requirement if the property has any gas appliances, under the Gas Safety (Installation and Use) Regulations 1998.
• Smoke and carbon monoxide alarms: smoke alarms on every storey, and a CO alarm in any room with a fixed combustion appliance (excluding gas cookers), under the Smoke and Carbon Monoxide Alarm Regulations.
• Furniture must comply with the Furniture and Furnishings (Fire Safety) Regulations 1988 (check for the permanent fire-safety labels).
• Electrical safety: here the rules are softer than many guides suggest. An EICR (Electrical Installation Condition Report) every five years, plus PAT testing of appliances, is strongly recommended best practice for a holiday let in England and Wales, but unlike long-term rentals it is not strictly a legal requirement there. In Scotland an EICR is required as part of short-term let licensing. Most responsible owners get one regardless, because it is the clearest evidence you have met your duty of care if something goes wrong.

There's also an EPC (Energy Performance Certificate) to consider: under the current "four-month rule", a holiday let generally needs a valid EPC if it is let for four months or more in a year, with a minimum rating of Band E at present.

Get these right before your first guest, not after. The genuine legal duties are not optional, and even the best-practice items are the foundation of both guest safety and the reviews that make or break a listing.

Step 5: Understand the tax position (this changed in 2025)

If you read only one section closely, make it this one, because the tax treatment of holiday lets changed fundamentally and recently.

Until April 2025, holiday lets that met certain occupancy conditions qualified as Furnished Holiday Lettings (FHLs) and enjoyed a set of valuable tax advantages: full mortgage-interest deduction, capital allowances on furnishings, a 10% capital gains rate via Business Asset Disposal Relief, and profits that counted as relevant earnings for pension contributions.

The FHL regime was abolished from 6 April 2025. From the 2025/26 tax year onwards, holiday lets are taxed under the standard property income rules, the same as an ordinary buy-to-let. In practical terms:

• Mortgage interest is no longer fully deductible; relief is now a 20% basic-rate tax credit, which matters most for higher-rate taxpayers.
• Capital allowances on new furnishings are gone, though Replacement of Domestic Items Relief lets you deduct like-for-like replacements.
• The 10% Business Asset Disposal Relief CGT rate on sale no longer applies; standard residential CGT rates do.
• Profits no longer count as relevant earnings for pension contributions.

There's also Making Tax Digital for Income Tax phasing in from April 2026, bringing digital record-keeping and more frequent reporting for landlords over certain income thresholds.

None of this means a holiday let is a bad investment, but it does mean the numbers work differently than they did two years ago, so model your returns on the current rules, not the old FHL ones. Given how much changed, this is an area where it's genuinely worth paying for an hour with an accountant who knows holiday lets, rather than relying on a blog (including this one) for your specific situation. For a fuller breakdown of each change, what it means in pounds, and the MTD deadlines, see our dedicated guide to holiday let tax in 2026.

Council tax or business rates?

One question almost every new owner asks: do you pay council tax or business rates? In England, a holiday let qualifies for business rates (rather than council tax) if it was available to let for at least 140 nights and actually let for at least 70 nights in the previous 12 months. Wales has higher thresholds. If you don't meet the criteria, council tax applies, and many councils now charge a second-home premium (up to double the standard bill) on properties that aren't someone's main residence, so this is a real cost to factor in. Whether business rates work out cheaper depends on your property's rateable value and whether you qualify for Small Business Rate Relief, so it's worth checking both.

VAT

For a single property this rarely comes up, but if you scale to several lets, note that holiday letting income counts towards the VAT registration threshold of £90,000 (rolling 12 months). Cross it and you have to register and charge 20% VAT on your rentals, which materially changes your pricing. It's a multi-property consideration, but worth knowing exists before you grow.

Step 6: Mortgages and finance

If you're buying with a mortgage, a holiday let needs a specialist holiday-let mortgage, not a standard residential mortgage and not an ordinary buy-to-let one. Lenders assess these differently, typically looking at projected seasonal rental income rather than just your salary, and the market is smaller, so rates and deposit requirements (often 25% or more) tend to be less favourable than residential. A broker who specialises in holiday lets is usually worth it, because the lender pool is narrow and the regulatory changes of the last two years have shifted how lenders view these properties. For a fuller explanation of how holiday let mortgages work (deposits, how lenders assess income, and why the wrong mortgage can breach your loan terms), see our guide to holiday let mortgages explained.

Step 7: Self-manage or use an agent?

You can run a holiday let yourself or hand it to a managing agent, and the right answer depends on your time, location and appetite.

• Self-managing keeps all the revenue but means handling bookings, guest communication, cleaning coordination, maintenance and the admin yourself. Practical if you live near the property and have time.
• A managing agent handles most or all of that for a fee, typically somewhere around 15% to 25% of your rental income depending on how much they do. It eats into margin but makes a remote or hands-off let viable.

Factor the agent's cut into your numbers from the start if you're likely to use one, because it's a significant ongoing cost that changes whether the investment stacks up.

Step 8: Set up booking, pricing and channels

With the property and compliance sorted, you need to get it booked:

• Listing channels: Airbnb, Vrbo, Booking.com and specialist agencies each reach different guests. Many owners list on several, managed through a channel manager or property management system (PMS) to avoid double-bookings.
• Pricing: dynamic pricing (adjusting rates by season, demand and local events) materially outperforms a flat rate. Tools exist to automate this.
• Photos and listing quality: the single biggest lever on bookings. Professional photos pay for themselves.
• Reviews: early five-star reviews are disproportionately valuable, so over-deliver for your first guests.

Step 9: Kit it out to compete

Beyond the basics, the amenities you offer increasingly decide whether you win the booking, because guests filter searches by them. Sykes' 2026 data points to clear income uplifts from certain features: properties with Wi-Fi earned around 26% more, hot tubs up to around 40% more, pet-friendly properties around 16% more, and accepting short breaks around 25% more. Reliable fast Wi-Fi, a well-equipped kitchen, and features like hot tubs or log burners all help a listing stand out. (Those percentages are reported averages from one large agency's portfolio, so treat them as indicative of direction rather than guaranteed returns for any single property.)

One amenity worth singling out, because demand is climbing fast and supply hasn't caught up: EV charging. A growing share of guests drive electric, and "can I charge here?" is becoming one of the questions they check before booking, especially for rural and coastal properties where public chargers are sparse. Offering charging widens your potential market and can win bookings you'd otherwise lose to a property down the road that offers it.

The thing to get right is how you handle the cost. Letting guests charge free means absorbing their electricity on your bill; charging a vague flat fee tends to feel unfair to someone who only topped up. The clean approach is to let guests pay per kWh for exactly what they use, billed automatically, which turns charging from a cost into an amenity that pays for itself. If you're weighing this up, we've written separately on how to bill holiday let guests for EV charging and the best EV chargers for holiday lets.

Frequently asked questions

Do I need planning permission to start a holiday let?

In most of England, not currently, though London has a 90-night annual cap on whole-property short-term lets without permission. A new planning use class for short-term lets has been proposed but is not yet in force, and some councils use Article 4 directions to require permission in high-pressure areas. Always check with your local planning authority, especially if buying specifically to let.

Do I pay council tax or business rates on a holiday let?

In England, business rates apply if the property was available to let for at least 140 nights and actually let for at least 70 nights in the past 12 months; otherwise council tax applies, often with a second-home premium. Which is cheaper depends on your rateable value and any Small Business Rate Relief.

Is a holiday let still worth it after the FHL tax changes?

It can be, but the maths changed. With the Furnished Holiday Lettings regime abolished in April 2025, the old tax advantages (full mortgage-interest deduction, 10% capital gains rate, capital allowances) are gone, so returns are tighter than they were, especially for higher-rate taxpayers with a mortgage. Model it on the current rules and a realistic occupancy figure for your area, not the old regime.

Can I get a mortgage for a holiday let?

Yes, but you need a specialist holiday-let mortgage rather than a residential or standard buy-to-let one. Deposits are typically 25% or more and the lender pool is smaller, so a specialist broker usually helps.

Do I need a licence to run a holiday let?

It depends on the UK nation. Scotland has required a short-term let licence since October 2022. England is introducing a national registration scheme (expected but not yet live), and Wales is rolling out its own framework. Check the current requirement for your specific location before letting.

How much does it cost to run a holiday let?

Beyond the mortgage, budget for cleaning and laundry between stays, maintenance, insurance, utilities, platform or channel fees, and (if you use one) a managing agent at roughly 15% to 25% of rental income. New owners often underestimate the changeover and maintenance costs.

Starting a holiday let in 2026 is very doable, but it's a more regulated and less tax-advantaged activity than it was a couple of years ago. Get the property and location right, check the planning and registration rules for your specific area (both have changed), sort insurance and safety before your first guest, model your tax on the post-FHL rules rather than the old ones, and invest in the listing quality and amenities that win bookings. Do that, and you've got the foundation of a holiday let that performs rather than just exists.

For the amenity side specifically, offering EV charging is one of the clearer ways to stand out as guest demand grows, and GuestCharge makes billing guests for it simple.