The average cost of a short-term holiday let sits at £3,325 per month across 30 UK hotspots – 292% more than a long-term rental.
The research, from Zero Deposit, found that it only costs £849 per month on average to have a long-term rental in one of these hotspots.
Sam Reynolds, its chief executive, said: “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.
“Holiday home purchases not only take much needed housing stock away from potential buyers, but they also reduce the level of available rental properties in a market where demand already outweighs supply substantially.
“On average, holiday homes across the top 30 areas we analysed are occupied for just 58% of the time and for many tenants, a short-term agreement just isn’t what they are looking for. Even if it was, they would face paying a hugely inflated price for the pleasure, with the average holiday home commanding 292% more per month in rental income which simply isn’t realistic.”
Holiday home rental price premiums
East Suffolk (+484%), Great Yarmouth (+437%), East Riding of Yorkshire (+405%) and Northumberland (+399%) also rank within the top five areas with the highest holiday let rental price premiums.
In traditionally popular areas such as Cornwall, the Isle of Wight, Dorset, South Hams, Cotswold and the New Forest, higher average rental prices within the private sector mean holiday let premiums aren’t quite as steep. Despite this, they still command between 224% and 327% more per month compared to the average privately rented property.
Holiday home stock driving up PRS rents
Not only do holiday homes command higher rents, but by removing these homes from the private rental market, it further reduces available PRS stock, pushing up private rents for ordinary tenants.
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.