With its stunning landscapes, historic landmarks, and thriving tourism industry, North Wales is a hotspot for staycations. But is buying a holiday let investment here a smart move?
With many changes happening in the holiday letting sector, it can be tricky for those considering investing in a holiday let in this region. North Wales is among the top 10 highest-earning locations for holiday lets and is undoubtedly a popular destination for tourists. The Welsh Government is currently making decisions on how to support this tourism while also addressing housing affordability and promoting community sustainability. However, these changes shouldn’t deter you. At Menai Holiday Cottages, our owners are seeing great success, and with the right effort and support, you can too!
Let’s explore why investing in a holiday let in North Wales could be a lucrative opportunity…
Thinking of investing in a Holiday Let in North Wales?
In 2024, Menai Holidays saw strong booking figures despite economic challenges and a rainy start to the year. Summer and autumn performed particularly well, with an average occupancy rate of 85%. These trends show the resilience and growing popularity of holiday lets in North Wales, making it an appealing option for property investors.
North Wales combines affordability with high demand. From families exploring Snowdonia’s beauty to couples seeking romantic breaks on Anglesey, the region attracts diverse visitors. Holiday lets here generate an average annual income of £24,000, with premium properties earning up to £50,000.
Features like pet-friendly amenities or hot tubs can boost revenue by up to 37%. With property prices averaging £213,000 (much lower than in hotspots like Cornwall) North Wales offers excellent rental yields without requiring a huge upfront investment.
Its affordability and enduring appeal make it a great choice for both seasoned investors and first-time buyers.
Reasons Why Holiday Lets Are a Good Investment in North Wales
So, why are holiday lets a good investment? Let’s investigate some of the reasons why our owners are thriving in their holiday letting journey.
- Strong Demand for Tourism
North Wales is a vibrant tourist destination, attracting millions of visitors annually. Iconic attractions like Snowdonia/Eryri National Park, the Isle of Anglesey, and Conwy Castle draw tourists from across the UK and beyond. The region’s mix of outdoor adventures, cultural experiences, and stunning landscapes ensures a consistent influx of visitors, making holiday lets a reliable source of income.
- High Rental Yields
Holiday lets in North Wales offer impressive rental returns, with an average gross income of £24,000 annually. Premium properties can generate up to £50,000, especially those with desirable features like hot tubs or pet-friendly options. These amenities often command higher rates, significantly boosting overall profitability.
- Investment Incentives
Holiday lets may qualify for attractive tax benefits. Properties that meet the criteria for furnished holiday lets can benefit from business rates relief instead of council tax. They may also be eligible for capital gains tax relief, providing an opportunity to maximise financial returns.
Head here for a complete Guide to Furnished Holiday Let Tax and Business Rates in Wales.
- Affordable Property Prices
With an average property price of around £213,000, North Wales is considerably more affordable than other UK holiday hotspots like Cornwall, where prices often exceed £300,000. This affordability opens the market to a broader range of investors, offering an accessible entry point for those starting or expanding their portfolio.
- Year-Round Appeal
Unlike seasonal destinations, North Wales has attractions and activities that appeal year-round. In summer, visitors enjoy beach days and water sports, while winter brings cosy cottage breaks and scenic walks in Snowdonia. This versatility helps maintain high occupancy rates, reducing the downtime that affects other locations.
- Growing Popularity of Staycations
The rise of staycations, driven by economic factors and global travel uncertainties, has fuelled domestic travel. North Wales, with its breathtaking landscapes and easy accessibility, has become a prime choice. This trend continues to bolster demand for holiday rentals in the region.
Key Features to Maximise Investment Potential
Buying just any property in North Wales and hoping for bookings won’t work. It’s important to be realistic about the market and understand that today’s guests expect good value for their money. So, ask yourself, why would someone book this property?
To make the most of your holiday let in North Wales, consider properties with:
- Proximity to Attractions
Properties near popular destinations like Yr Wyddfa (Snowdon), the highest mountain in Wales and England, the coastal towns of Anglesey, historic castles like Conwy, or adventure sites like Zip World are in high demand.
If you’re thinking of buying a holiday let in North Wales, but aren’t sure where to pick, head to our Best Places to Buy A Holiday Home in North Wales blog to explore our top spots.
- Luxury Amenities
Adding features like hot tubs or log burners can make your property more appealing, especially during off-peak seasons when guests look for extra comfort and cosiness.
- Garden Areas
32% of guests prioritise outdoor space when booking a holiday let. Having outdoor seating is a great way to cater to those wanting to dine al fresco in the Welsh sunshine.
- Pet-Friendly Options
Nearly half of UK holidaymakers look for pet-friendly accommodation, which can significantly boost occupancy rates. North Wales, with its abundance of dog-friendly beaches and walks, is ideal for this.
Our guide on maximising your holiday let income goes into more detail on all the things you can do to ensure you’re getting the most out of your holiday let.
Challenges to consider when buying a holiday let in North Wales
While the benefits of property letting in North Wales are clear, it’s also important to acknowledge the challenges. Our blog on Navigating the New Holiday Let Rules in Wales goes into more detail on some of the below challenges and is worth a read if you’re thinking of buying a holiday let in this region.
- Seasonal Income Variability
Seasonal income variability is a key factor for holiday let owners in North Wales. While summer brings high occupancy and increased bookings, the winter months can see a drop in demand due to colder weather and shorter days. However, with strategic marketing or winter promotions, as well as investments in sought after features, it’s possible to manage these fluctuations and maintain a more consistent income year-round.
- New Tourism Tax
The Welsh Government has introduced a tourism tax (or visitor levy) to support local communities impacted by high visitor numbers. Expected to be rolled out in the coming years, this tax will apply to overnight stays, including holiday lets, in popular destinations like North Wales.
While the tax aims to mitigate tourism’s environmental impact and fund community initiatives, it may increase costs for property owners and potentially deter some visitors. Investors should factor this into their pricing strategies to stay competitive without reducing demand.
- The 182-Day Rule
The introduction of stricter criteria for holiday lets to qualify for business rates relief is another significant change. As of April 2023, properties in Wales must:
- Be available for letting at least 252 days a year.
- Be let for a minimum of 182 days annually.
This policy aims to distinguish genuine holiday lets from second homes that aren’t actively rented. However, meeting the 182-day threshold can sometimes be difficult, especially during off-peak seasons. Owners who don’t meet the criteria may face reclassification under council tax, often at higher premiums due to second home surcharges in many Welsh counties.
- Planning Permission
- Change of Use: From 1 September 2024, planning permission is required in some areas, like Gwynedd, to convert residential properties into holiday lets to manage the impact on local communities.
- Article 4 Direction: Gwynedd’s Article 4 Direction removes permitted development rights, requiring formal planning permission for such conversions.
Our blog Do You Need Planning Permission for a Holiday Let in North Wales? goes through everything you need to know about planning permission and the new rules.
How Menai Holiday Cottages can help you succeed
Despite the challenges in the North Wales letting market, our bookings per property have increased by 8%, and revenue per property has grown by 7% compared to 2023.
This proves that challenges shouldn’t deter you- if you know you have a nice and clean property in a prime location, people will book it!
Don’t know where to start?
If you’re new to holiday letting or thinking of buying a property, Menai Holiday Cottages is here to guide you every step of the way. With years of expertise in the North Wales holiday market, we ensure nothing is overlooked, helping you maximise your property’s potential.
Our experienced property consultants are available from day one to offer personalised advice and support tailored to your needs. And the best part? We don’t charge anything until your first booking.
Let your property with North Wales’s leading holiday letting agency
As part of the Sykes Cottages family, your property benefits from millions of pounds worth of nationwide advertising, while still retaining the personal touch and local expertise that Menai Holiday Cottages is known for.
For those seeking a hands-off approach, we offer a fully managed service, removing all the stress of holiday letting and allowing you to enjoy the benefits of your investment without the hassle.
With Menai Holiday Cottages, you’re not just joining a leading holiday let agency, you’re partnering with a team that’s passionate about North Wales and dedicated to your success.
Final thoughts
Whether you’re looking at buying a holiday let in North Wales or considering if “is buying a holiday let in Wales a good idea?”, the answer is a resounding yes for those that are willing to invest strategically. The combination of a booming staycation market, affordable property prices, and high rental yields makes holiday cottages in North Wales a compelling investment.
Have you thought about investing in North Wales holiday cottages? Let us know—we’d love to hear your thoughts!
Or if you want to read more about getting started with your holiday letting journey, have a look at Our Beginners Guide to Holiday Letting.
