A year of meaningful momentum in the holiday let market

After several years of adjustment, 2025 is building on a year of steady revival for the UK’s holiday let sector. Despite the withdrawal of the furnished holiday lettings (FHL) tax scheme in April and increasing regulatory pressure, the market remains resilient, driven by enduring demand for domestic breaks and a shift towards more professional investment models.

A customer behaviour analysis from lettings agent Sykes Holiday Cottages showed that nearly two-thirds of Brits (63%) planned to take a UK break this year, with around a third (34%) intending to make it their main holiday in 2025. That sustained appetite for self-catered UK travel is helping to underpin rental yields and occupancy rates across popular regions such as Cumbria, Cornwall and North Wales.

For brokers, this creates a nuanced opportunity. While higher operating costs and tighter tax rules have reshaped the economics of holiday letting, the appetite among experienced investors remains strong. For landlords in the know, investing in the sort of pristine properties consumers love with year-round income potential and added-value extras like a hot tub or sea view will produce more reliable yields. 

Where the opportunities lie

Recent years have seen more buy-to-let landlords restructuring the finances surrounding their investments. Many now borrow through limited companies, diversify into short-term lets as part of a portfolio, or remortgaging in greater numbers to fund energy-efficiency or general upgrades.

This evolution plays to brokers’ strengths. Those who understand the interplay between the tax on lending structures, local demand, and changing affordability assessments can offer advice on these areas to clients to help them secure funding. This way, brokers become more than just a source or finance and the partnership deepens to help clients plan long-term.

Lenders that combine product flexibility with deep sector expertise can offer brokers real partnership. For us, both the volume and value of holiday let and limited company buy-to-let completions rose sharply between January and September 2025, with case volumes up 18% and the total value of lending increasing 34%. Our proportion of broker-introduced business also grew 15%, reflecting renewed market confidence and the impact of an expanded intermediary proposition.

Adapting to a changing landscape

Much of this progress reflects how lenders and brokers have evolved together. Over the past 18 months, for example, The Cumberland has enhanced accessibility for intermediaries. We went live on sourcing systems including Twenty7Tec, Mortgage Brain, Iress Trigold and L&G Ignite. We’ve also strengthened relationships with major networks including Sesame, MAB, Quilter Financial Planning and Paradigm Mortgage Services throughout the year. 

These moves have broadened broker access to our specialist holiday let products making them more visible to the wider broker population. Importantly, digital tools haven’t replaced the human element that defines success in this sector. Relationship management is still essential and, at The Cumberland, we’re committed to our Kinder Banking ethos, which means doing what’s right for customers, communities and brokers. This approach continues to shape how our team supports the intermediary community each day.

A positive outlook

Changes to regulation like the Furnished Holiday Lettings taxation scheme and council tax and stamp duty hikes may have made holiday lets more complex investments, but they remain an integral part of the UK property landscape. The combination of sustained staycation demand, more professional landlord models, and an improving rate environment suggests that the market is entering a new phase. So, quality, sustainability and strategic financial planning matter more than ever.

For brokers, the most effective approach, in our opinion, is to combine local insight with lender partnerships that can navigate this nuanced market.

As Cumberland marks its 175th anniversary, our two decades of holiday let lending experience offers perspective on how far the market has come, and where it’s heading next. Our growth over 2025 points both toward a market recovery and a more mature, balanced holiday let industry built on the solid foundations of our partnership with our broker and landlord clients.