If you are a farmer or landowner and are looking to generate some extra income, then utilising existing buildings and land and diversifying into holiday letting could be an option for you.
According to Farmers Weekly, “Higher demand, coupled with concerns about post-Brexit support for agriculture, has made a farm diversification into letting cottages, barns, annexes and apartments more attractive”.
With the current demand for staycations being at an all-time high, now is such a great time to start holiday letting.
What is Farm Diversification?
Farm diversification for existing farming businesses involves generating further revenue through a new avenue, such as holiday letting.
We are lucky that North Wales is surrounded by so much land and farmland. A lot of these farms have old sheds, unused barns, outbuildings and space which can be great for holiday letting!
Whether it be a barn renovation, converting an outbuilding or making space for some glamping pods or shepherd’s huts, there are plenty of options for you.
What Are My Options for Farm Diversification?
Building conversions
One of the most popular options is to convert an existing outbuilding such as a barn, stable or cowshed. Be creative! Customers love finding quirky stays.
Having an existing structure in place makes it easier in terms of turnaround time, although you may want to do some due diligence with a surveyor in terms of the condition of the building before proceeding.
These types of conversions are always popular with guests, as they offer a more traditional, rural holiday experience.
Some great examples can be seen here: The Outbuildings (Sleeps 14), Bryn Eira (Sleeps 10) & Hen Gilfach Stables (Sleeps 2)
The Outbuildings – Ref: 1048267
Glamping & Shepherds Huts
In recent years, shepherd huts have increased in popularity. The fact many can be transportable makes them ideal to move around farmland to find the perfect spot for a holiday.
This is one of the most popular options for couples looking for a getaway. You can be really creative when it comes to furnishing it!
Glamping pods tend to be the more luxurious alternative to shepherd’s huts, but still retain that quaint & quirk edge.
Some great examples can be seen here: Shepherds Huts – Just The Ewe of Us (Sleeps 2) & Llety’r Bugail (Sleeps 2)
Glamping – Orchard Pod (Sleeps 2) & Woodland Pod (Sleeps 4)
Orchard Pod – Ref: 1053193
Log Cabins & Lodges
Log Cabins & Lodges are a great option for those looking for something simple and effective to add to their existing land.
Some great examples can be seen here: Ffrwd Lodge (Sleeps 6)
Tax Considerations and Financial Benefits
As with any other business, holiday letting can bring a number of beneficial tax benefits.
If you register your property and meet the criteria to be classed as a Furnished Holiday Let (FHL), then you may be able to claim capital gains tax relief and small business rate relief as well as a number of other tax-related benefits as outlined in our Furnished Holiday Let Tax Guide.
Will I Need Planning Permission?
As with any building project you will need planning permission. It may also be necessary to apply for a change of use if you plan to convert an existing building. The council in your local area will be able to provide you with more information. You will also need to consider a wide range of health and safety laws and regulations with your project.
Environmental Benefits of Farm Diversification through Holiday Letting
Converting unused farm buildings into holiday lets can promote sustainability. By repurposing old structures, farmers reduce waste and limit the need for new construction. Moreover, holiday lets in rural areas attract eco-tourism, boosting both income and environmental awareness.
Attracting the Right Guests
Farm stays often appeal to eco-conscious travellers, families, and those looking to escape urban environments. Marketing should emphasize the unique rural experience, whether it’s farm-to-table meals, nature walks, or the chance to engage with farm life. Partnering with local tourism boards or sustainable travel platforms can also help increase visibility.
Local Economic Impact
Diversifying into holiday letting helps stimulate the local economy by attracting tourists who spend on nearby attractions, shops, and services. It also creates job opportunities for local workers, such as cleaners, maintenance staff, and property managers.
Please Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA.
As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.
As a holiday letting owner you are responsible for compliance with health & safety laws, regulations and guidance, and for having suitable insurances in place (not Sykes Holiday Cottages or its brands). From time to time, Sykes shares information with you on the topic of health and safety and insurance. When it does so, it is not providing you with advice (legal, financial, tax or otherwise); please seek your own as you see fit. In addition, it is not making any representations or warranties about the information being complete or free from errors or inaccuracies. Sykes shall not be liable for any loss or damage arising under or in connection with your reliance on it.
