Did you know that UK rural tourism is booming, with staycations on the rise by over 20% in recent years? If you’re a farmer or landowner looking to generate additional income, exploring farm diversification ideas such as holiday letting could be a smart move.
For farmers across the UK, times are challenging, but many are tackling hardship by looking at farm diversification ideas. With subsidies disappearing and costs rising, adapting is crucial- and holiday letting could be the solution. 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 UK staycations booming, now is the perfect time to explore farm diversification ideas and tap into this growing rural tourism market…
What is Farm Diversification and why should you do it?
Exploring different farm diversification ideas allow existing farming businesses to generate additional revenue through new ventures- one of the most rewarding options being holiday letting.
In North Wales, we’re fortunate to be surrounded by vast farmland, much of which includes old sheds, unused barns, and outbuildings that offer excellent potential for farm diversification.
Whether it’s converting a barn, repurposing an outbuilding, or setting up glamping pods or shepherd’s huts, there are plenty of ways to transform unused spaces into a profitable holiday accommodation business.
Benefits of Farm Diversification:
Farm diversification offers a range of benefits that can help your farming business thrive in changing economic times. By exploring new revenue streams, such as holiday letting, you can reduce your reliance on traditional farming income.
- Additional Income: Create a steady revenue stream by transforming unused buildings or land into holiday accommodation.
- Maximise Resources: Put unused barns, outbuildings, or empty plots to productive use, turning them into charming holiday homes or unique glamping spots.
- Year-Round Revenue: Unlike traditional farming, holiday letting provides consistent income throughout the year.
Farm Diversification Ideas for Holiday Letting
In this section, we’ll explore creative and practical farm diversification ideas to help you make the most of your property through holiday letting, followed by some brilliant examples from our owners.
1. Barn conversions
Converting an existing outbuilding, such as a barn, stable, or cowshed, is one of the most popular farm diversification ideas for generating additional income. The beauty of these conversions is that they offer a quirky, authentic experience that guests absolutely love.
Using existing structures for your conversion is a huge advantage, as it reduces turnaround time compared to building from scratch. However, it’s essential to consult a surveyor to ensure the building is in good condition before you proceed.
Conversions like these are always a hit with guests, as they provide a traditional, rural holiday experience. You can infuse your creativity into the design, offering something unique and memorable.
Examples of farm building conversions:
Gwelfor Barn, Llangoed (Sleeps up to 10)
Hen Beudy, Porthmadog (Sleeps 2)
2. Glamping and Shepherds Huts
In recent years, shepherd’s huts have surged in popularity, offering a charming and flexible accommodation option. Their transportable design makes them ideal for repositioning around farmland, allowing you to find the perfect scenic spot for guests to enjoy a rural escape.
For those looking for a more upscale experience, glamping pods provide a luxurious alternative to shepherd’s huts while still retaining their rustic charm and quirky appeal.
These types of farm diversification ideas are particularly popular with couples seeking a cosy, secluded getaway, and there’s plenty of scope to get creative with the interior design to make each stay unique.
TOP TIP: Adding luxury touches like a hot tub can significantly boost your holiday let’s appeal. Our data shows that properties with hot tubs earn 37% more revenue and attract year-round bookings. Guests love relaxing under the stars after a day exploring the countryside—making this a must-have feature for many rural escapes!
Examples of glamping and shepherds huts:
The Hideaway Pod, Criccieth (Sleeps 4)
Shepherd’s Stone, Llanfairynghornwy (Sleeps 2)
3. Log Cabins & Lodges
Adding log cabins or lodges to your land is a fantastic way to generate additional income while making the most of your farm’s natural surroundings. These structures offer more spacious accommodation option, appealing to families and groups.
One of the key advantages of log cabins and lodges is their versatility- they can be designed for year-round stays, featuring modern amenities such as wood burners, underfloor heating, and even private hot tubs to attract more guests. Positioned in a scenic location on your farmland, they provide a peaceful escape while still offering all the amenities one could need.
Examples of Log Cabins and Lodges:
Meadow Lodge, Corwen (Sleeps 4) OUR TOP BOOKED PROPERTY IN 2024!
The Keepers Lodge, Nefyn (Sleeps 20)
Will I Need Planning Permission for Farm Diversification?
If you’re considering converting farm buildings or adding new structures for holiday letting, planning permission is often required. Here’s a quick overview of what to expect:
When Planning Permission is Needed:
- Conversions: Changing barns, outbuildings, or farm cottages into holiday lets often requires approval, especially if structural changes like new windows or extensions are involved.
- New Structures: Adding glamping pods, shepherd’s huts, or lodges typically requires planning permission, even if the structures are temporary.
- Change of Use: Repurposing agricultural buildings for holiday accommodation may need a “change of use” application.
Key Factors to Consider:
- Structural Changes: Older buildings may need surveys to confirm they’re suitable for conversion.
- Article 4 Restrictions: In areas like Gwynedd, these rules limit development rights and require full planning applications for holiday lets.
- Protected Areas: Farms in conservation areas or national parks (e.g., Snowdonia) must meet stricter environmental and visual impact requirements.
- Access and Parking: Adequate access and parking for guests must be factored into your proposal.
- Utilities and Amenities: Adding water, electricity, or drainage may require separate permissions.
Tips for a Smooth Planning Process:
- Engage Early: Speak with your local planning authority or a consultant at the start of your project to understand specific requirements.
- Prepare Documentation: Submit detailed plans, including site layouts and environmental impact assessments, to avoid delays.
- Emphasize Benefits: Highlight how your project supports rural tourism and benefits the local economy in your application.
Special Considerations for Wales:
- Article 4 in Gwynedd: This regulation removes automatic development rights, requiring full planning applications for any holiday let conversions. Carry on reading more more information on Article 4.
- Eco-Friendly Proposals: Projects that incorporate sustainability features, such as solar panels or rewilding areas, may gain favor with planning authorities.
For further details, head to our bog Do You Need Planning Permission for a Holiday Let in North Wales?, visit your local council’s planning guidance or consult a planning professional.
Article 4 in Gwynedd: What You Need to Know
Article 4, introduced in Gwynedd in 2022, removes permitted development rights for converting existing properties into holiday lets. This regulation aims to control the rise of second homes and short-term rentals, ensuring sustainable housing for local communities.
Key Points:
- Purpose – To regulate the growth of holiday lets and protect housing availability for Welsh residents.
- Planning Application Requirements – Full planning applications are now required for new holiday lets, conversions, and certain farm diversification projects.
- Affected Areas – Mainly Gwynedd, including popular tourism destinations where high numbers of second homes exist.
Implications for Holiday Let Owners in Wales:
- More rigorous approval processes for conversions and new builds.
- Greater emphasis on demonstrating how your project benefits the Welsh economy and local communities.
- Possible delays as councils evaluate applications against housing and tourism policies.
TOP TIP: Work closely with a Welsh planning consultant to ensure your proposal aligns with local policies and rural development goals.
Tax Considerations and Financial Benefits
Holiday letting offers several tax advantages, making it an attractive farm diversification idea.
If your property qualifies as a Furnished Holiday Let (FHL), you may benefit from:
- Capital Gains Tax Relief – Potential tax savings when selling the property.
- Small Business Rate Relief – Reduced business rates if your holiday let meets specific criteria.
- Additional Allowances – Access to tax deductions on furniture, fittings, and running costs.
For a full breakdown of FHL tax benefits, check out our Furnished Holiday Let Tax Guide.
Environmental Benefits of Farm Diversification through Holiday Letting
Transforming unused barns, cottages, or outbuildings into holiday accommodation reduces waste and promotes sustainability. Repurposing existing structures limits new construction while supporting eco-tourism- a growing trend that attracts visitors seeking low-impact rural escapes.
By integrating green energy solutions, water conservation systems, or wildlife-friendly landscaping, you can enhance the eco-credentials of your farm stay, appealing to environmentally conscious guests.
To learn more about creating a sustainable holiday let head to our guide on Making Your Holiday Cottage Eco-Friendly and More Sustainable.
Standing out from the Competition
Farm stays are highly appealing to:
- Eco-conscious travellers looking for sustainable accommodation.
- Families seeking space and outdoor experiences.
- City dwellers wanting a peaceful countryside retreat.
- Couples wanting a romantic stay.
To maximise bookings and income from your farm diversification project, your accommodation needs to stand out in a competitive market. Understanding your target guests and tailoring your offering to meet their needs is key to success.
Here are some important factors to consider to make your holiday let thrive:
To attract more guests and maximise your farm diversification income, it’s essential to create a unique and memorable experience. Here are some key ways to differentiate your holiday accommodation:
1. Farming as a Unique Selling Point (USP)
Your working farm is one of your biggest assets- use it to your advantage. Guests love the idea of authentic farm stays, whether it’s meeting the animals, learning about daily farm life, or experiencing seasonal activities like lambing or fruit picking. Offering farm tours, hands-on experiences, or local produce can make your accommodation more appealing and unique.
2. Luxury Features: Hot Tubs & Log Burners
Adding luxury touches like a hot tub or log burner can boost bookings and increase nightly rates. Guests enjoy soaking in a hot tub under the stars after a day exploring the countryside, while a cosy log burner makes your accommodation perfect for autumn and winter stays. These features help create a relaxing retreat that encourages repeat visits all year round.
3. Accepting Short Breaks
Offering flexible booking options, including weekend getaways and mid-week stays, can help increase occupancy. Many travellers, especially couples and last-minute bookers, prefer shorter stays rather than committing to a full week. By catering to this demand, you can fill gaps in your calendar and maximise revenue.
4. Highlighting Stunning Views & Peacefulness
If your farm offers breathtaking views, rolling countryside, or a peaceful, secluded setting, make sure to highlight this in your marketing. Guests seeking an escape from city life will be drawn to tranquil surroundings, uninterrupted landscapes, and opportunities to reconnect with nature. High-quality photography and well-written descriptions will help showcase these features.
5. Accept Pets
Since 2019, searches for pet-friendly holidays have risen by 60%. On average, properties that welcome dogs secure four additional bookings per year and generate 18% more revenue, making pet-friendly accommodation a worthwhile investment.
To attract dog owners, consider adding an enclosed garden for safety and convenience. Providing pet-friendly extras such as dog bowls, towels, and even a composting ‘dog loo’ can enhance the experience for guests and their four-legged companions.
6. Emphasising Sustainability
Eco-conscious travel is on the rise, and sustainability can be a key selling point. Consider incorporating:
- Renewable energy sources such as solar panels or biomass heating.
- Eco-friendly amenities like recycled materials and organic toiletries.
- Wildlife-friendly spaces, such as wildflower meadows and rewilding areas.
- Farm-to-table experiences, offering local and organic produce.
Positioning your holiday let as an environmentally responsible choice can attract a growing market of eco-conscious travellers.
Head to our guide on Maximising your Holiday Let Income for more tips and tricks.
Start Your Farm Diversification Journey
Setting up a holiday let may seem daunting, but with expert guidance, it can be a smooth and rewarding process. If you’re considering farm diversification but don’t know where to start, Menai Holiday Cottages can help.
We’ll support you every step of the way, from your initial idea to welcoming your first guests. We also work with farm diversification specialists and stay up to date with the latest rules and regulations, ensuring you have the right support at every stage.
From glamping pods and shepherd’s huts to luxury barn conversions, we’ve helped many owners turn unused spaces into successful holiday lets. Our Property Consultants can also provide income and booking projections, useful for planning or securing funding.
Now is the perfect time to get started- get in touch today!
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.
