2026 holiday let trends: What brokers should know

Meeting a high demand

Despite continued economic uncertainty, demand for UK holiday accommodation remains strong. Since Covid-19, there has been a boom in UK ‘staycations’, and this spike in popularity has remained long after the pandemic. According to Sykes Holiday Cottages’ Holiday Letting Report ^[1], guests are prioritising luxury properties in desirable locations, with strong demand for coastal and countryside breaks, shorter stays, and added-value features such as pet-friendly accommodation and premium amenities.

For holiday homeowners, this continued increase in demand presents an excellent opportunity for top-tier pricing and repeat custom, but has also resulted in increased competition. That’s why many are reviewing occupancy levels, pricing strategies and operational costs more closely than ever before, reinforcing the need for effective risk management and appropriate insurance cover. ^[2]

Pressure from council tax and business rates

Recent guidance from GOV.UK ^[3] confirms that to qualify for business rates rather than council tax, holiday lets must now meet strict minimum letting thresholds. This includes being available to let for at least 140 days per year and actually let for a minimum number of days.

Should holiday properties fail to meet these criteria, they could be required to pay council tax instead, which is often more expensive than business rates. Furthermore, many local authorities have introduced or increased council tax premiums on second homes, further adding to owners’ financial pressures.

For brokers, these rising costs could make clients more sensitive to risk, meaning it’s essential that insurance arrangements are accurate, comprehensive and reflect the way the property is used.

More professional operations

Brokers are increasingly seeing the holiday let market become less of a side hustle and more of a professional operation. Many owners now run multiple properties or use professional management companies. This shift positions holiday lets closer to small hospitality businesses rather than traditional residential risks, meaning greater exposure, including:

• Increased public and employers’ liability risk
• Higher guest turnover and wear and tear
• Greater reliance on online booking platforms and digital systems

Supporting brokers in a changing landscape

For lifestyle and leisure brokers, it’s important to stay up to date with the latest holiday let trends, allowing you to continue giving informed advice. As taxation, regulation and guest expectations continue to shift, insurance solutions must keep pace to ensure clients remain appropriately protected.

Sustainability and guest expectations

For holiday home guests, the sustainability or – how ‘green’ a property is – remains a growing priority, with 21% of Britons willing to invest more in products and services that favour it. ^[4]  This drive toward greener consumerism has encouraged many holiday homeowners to invest in energy-efficient upgrades, including renewable heating systems and EV charging points. ^[5]

While these changes are wholly positive, they affect the property’s rebuild costs and reinstatement values, underlining the importance of regular policy reviews to ensure sums insured remain adequate.

Sources

[1] Sykescottages.co.uk/letyourcottage/advice/article/holiday-letting-outlook-report-2025

[2] Holiday let owner income climbs to £24,600 in 2024

[3] Business rates: Self-catering and holiday let accommodation - GOV.UK

[4] British attitudes towards sustainability in 2024: Key insights from YouGov data

[5] Sustainability and eco-friendliness for holiday homes