The latest research from Zero Deposit has revealed that holiday homes do not only command higher rents, but reduce homes available in the PRS – pushing up rents for ordinary tenants.
The analysis shows that in the last year, the average private rent has increased by 5.1% across England.
However, across the nation’s 30 top holiday home hotspots, this annual increase climbs to 6.4%.
In Arun, this annual increase is as high as 22.6%, with Folkestone and Hythe (+19.8%), Bournemouth, Christchurch and Pool (+12.3%), Chichester (+11.9%) and Torridge (+10.3%) also seeing far higher rates of rental price growth.
The report also highlights that it’s not just homebuyers being pushed out of their local housing markets across England’s holiday home hotspots, with many tenants also struggling as the average holiday home rents for 292% more per month — although in some areas this climbs as high as 488%.
Zero Deposit analysed the top 30 holiday hotspots across England that are home to the highest number of holiday homes as a proportion of total dwellings stock using ONS data from the 2021 census.
There are almost 5,000 homes currently listed across the market in these 30 holiday home hotspots specifically targeted at investors looking for short-term let investment opportunities.
This equates to as much as 7% of total homes currently listed on the market, a significant proportion of stock that could instead be utilised to help buyers and private renters.
Nationally, these holiday investment listings account for just 2% of total homes listed across England.
Further analysis by Zero Deposit shows that the average monthly rent for a private rental property averages £849 per month across these top 30 hotspots.
However, the average monthly income from a short-term holiday lets sits at a huge £3,325 per month based on an average monthly occupancy rate of just 58% — 292% more than the rental income available via the traditional PRS.
Sam Reynolds, CEO at Zero Deposit, commented: “Much has been said about the severe disadvantage many homebuyers face as a result of holiday home purchases driving up house prices in popular holiday hotspots.
“However, tenants in these areas are also facing a significant disadvantage when it comes to both the availability and affordability of rental market stock.
“It really is a tough situation and one that you need to understand from both sides.
“Landlords have seen the profitability of their BTL portfolios dwindle in recent years as a result of numerous legislative changes from the government.
“So you can understand why many are turning to the short-let model in areas where demand is high.
"Of course, this doesn’t help local tenants who are ironically the ones impacted most because of government changes designed to help them.”
