How Much Can You Earn From a Holiday Let in the UK? (2027)
There's no single UK figure for holiday let income: your earnings depend on your nightly rate, the nights you sell, and what you subtract for platform fees, running costs, and tax. Plug your numbers into that formula, and you'll get a far more reliable answer than any national average.
Occupancy usually makes or breaks the maths, so start with our guide to the average Airbnb occupancy rate in the UK. This guide then turns it into a yearly profit figure, using 2027 tax and local rules that can change the result.
In this guide:
- How to Calculate Your Holiday Let Income
- A Worked Example: A Two-Bedroom Cottage
- How Holiday Let Income Is Taxed After the FHL Changes
- Business Rates, Council Tax and Local Rules
- Common Mistakes When Estimating Holiday Let Income
- How to Track and Grow Your Holiday Let Income in Smoobu
- Frequently Asked Questions
How to Calculate Your Holiday Let Income
Every holiday let income estimate comes down to five inputs. Get each one as close to reality as you can, and the result will be far more useful than a figure from a sales brochure.
| Input | What it means | Where to find it |
|---|---|---|
| Nightly rate | The average price you charge per night across the year, not just in August | Comparable listings near you, in high and low season |
| Nights available | The nights you're willing to let, after your own stays and maintenance | Your own calendar |
| Occupancy | The share of available nights that actually get booked | Local data, or your own booking history |
| Fees and stay costs | Platform commission, cleaning and laundry per stay | Your platform's fee page and your cleaner's prices |
| Fixed costs | Utilities, insurance, repairs, rates or council tax, software | Your bills from the past year |
The formula is simple: nightly rate × nights available × occupancy gives your gross income. Subtract platform fees and per-stay costs, then fixed costs, to get your profit before mortgage interest and tax.
Platform fees deserve a careful look. Airbnb is moving all home hosts to a single host-only fee, and on that structure most hosts pay 15.5% of the booking subtotal (as of November 2026). Booking.com and other channels charge their own commission, so check your contract with each one.
Looking for the bigger picture beyond the UK, including purchase costs and return on investment? Our general guide on how much you can earn with a holiday home covers those questions.
A Worked Example: A Two-Bedroom Cottage
Here's how the formula plays out for an imaginary two-bedroom cottage. Every input below is an assumption chosen for illustration, not a UK average or a market benchmark. Swap in your own figures to get your answer.
The assumptions: a nightly rate of £150, 300 nights available a year, an average stay of three nights, and £60 per changeover clean. Every booking comes through Airbnb at the 15.5% host-only fee.
Fixed costs are set at £6,700 a year for utilities, broadband, insurance, repairs, laundry and software, with no business rates to pay.
| Occupancy (nights booked) | Gross income | Profit before mortgage and tax |
|---|---|---|
| 40% (120 nights) | £18,000 | £6,110 |
| 50% (150 nights) | £22,500 | £9,313 |
| 60% (180 nights) | £27,000 | £12,515 |
At 50% occupancy, the £22,500 gross loses £3,488 to platform fees, £3,000 to 50 cleans, and £6,700 to fixed costs. That leaves £9,313 before mortgage interest and tax, which is roughly 41% of what guests paid.
Look at what happens between the rows. Ten extra points of occupancy add £4,500 in bookings but more than £3,000 in profit, because the fixed costs are already covered. That's why filling quiet weeks often matters more than squeezing a few extra pounds out of peak season.
Want to see these numbers for your own property instead of an example? Try Smoobu free for 14 days and track real revenue and occupancy from the first booking.
How Holiday Let Income Is Taxed After the FHL Changes
The biggest change for UK hosts is that the furnished holiday lettings (FHL) tax regime no longer exists. HMRC abolished the FHL rules from 6 April 2025 for Income Tax and Capital Gains Tax, and from 1 April 2025 for Corporation Tax.
In practice, HMRC now taxes a holiday let much like any other residential property business. These are the changes that hit your income most directly:
- Mortgage interest: if you pay Income Tax, relief on residential finance costs is restricted to the basic rate of Income Tax, so higher-rate taxpayers no longer deduct interest in full
- Furniture and equipment: new spending no longer qualifies for capital allowances; you can claim replacement of domestic items relief instead when you replace furnishings
- Pensions: holiday let profits no longer count as relevant earnings for pension tax relief
- Selling up: FHL-specific Capital Gains Tax reliefs, such as Business Asset Disposal Relief, no longer apply to new disposals
Two thresholds matter at either end of the scale. With modest rental income, the first £1,000 of property income is tax-free under the property allowance, although you then can't deduct your actual expenses. If you're growing fast, you must register for VAT once taxable turnover exceeds £90,000 in 12 months.
Reporting is changing too. Making Tax Digital for Income Tax applies from 6 April 2026 if your qualifying self-employment and property income was over £50,000 in 2024 to 2025. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
Smoobu Pro Tip: Keep a running list of every cost tied to the let, from linen to the boiler service, with dates and receipts. When you sit down with your accountant, you'll be choosing between the property allowance and real expenses with actual numbers rather than guesses.
Tax depends on your whole situation, so treat this section as orientation rather than advice. Smoobu isn't a tax adviser: for your own figures, speak to an accountant who knows property.
Business Rates, Council Tax and Local Rules
Whether you pay business rates or council tax depends on how much you let. In England, a property pays business rates when it was available to let for at least 140 nights and actually let for at least 70 nights in the last 12 months.
In Wales, the same page sets the bar higher, at 252 nights available and 182 nights let.
Scotland uses 140 nights available and 70 nights actually let in the financial year. If your let misses the thresholds anywhere in Great Britain, it is treated as a home and pays council tax instead.
Business rates aren't always a big bill. In England, you pay no business rates on a property with a rateable value of £12,000 or less if it's the only property your business uses, with tapered relief up to £15,000.
English councils can charge a second homes premium of up to 100% since 1 April 2025, and Welsh councils can set premiums of up to 300%. Check your own council's charge if your let may fall short of the business rates thresholds.
Local rules can also limit your nights or add costs:
- Scotland: every short-term let needs a license from the local council, including holiday cottages, and some areas such as Edinburgh are control areas where planning permission may also be needed
- Edinburgh: a 5% visitor levy applies to stays from 24 July 2026, charged on the first five nights of a stay
- Wales: you must register your visitor accommodation by 31 March 2027, and councils that opt in can charge a visitor levy of £1.30 per person per night (75p for hostels and campsites), starting with Cardiff for stays from 1 April 2027
- London: letting a home as short-term accommodation for more than 90 nights in a calendar year needs planning permission, which caps your nights unless you have it
- England: the government has confirmed plans for a mandatory national registration scheme for short-term lets, so watch for the launch date
Choose your nation or city on the map to see which thresholds, premiums, licenses and levies apply to your holiday let. For licenses, planning and safety rules in more depth, read our guide on how to manage an Airbnb legally in the UK.
2026 · Great Britain · Holiday let costs
What changes your holiday let numbers in each nation
England, Scotland and Wales set different thresholds for business rates, different council tax premiums and different rules on licences, registration and visitor levies. Choose a nation or a city pin to see what can change your costs or your bookable nights there.
Where the rules apply
3 nations · 3 city examples- Licence required
- Registration required by 31 March 2027
- National register planned
- Not covered in this guide
- City with its own limit or levy (click a pin)
City pins show local limits and levies on top of the national rules. Northern Ireland is not covered in this guide.
Information snapshot: November 2026. Each entry shows when it was last checked.
A visitor levy is usually passed on to guests, but it still raises the total price they see. In a price-sensitive area, that can nudge you to hold your nightly rate rather than raise it.
Common Mistakes When Estimating Holiday Let Income
Most disappointing holiday let returns come from optimistic inputs, not bad luck. These are the traps worth avoiding:
- Pricing the whole year like August: a peak-season rate times 365 nights overstates income badly; use a realistic average across high, shoulder and low season
- Counting every night as available: your own holidays, deep cleans and repairs all take nights out of the calendar
- Forgetting per-stay costs: cleaning, laundry and welcome supplies scale with the number of stays, so many short stays cost more to run than a few long ones
- Ignoring the gap between gross and net: in the example above, less than half of what guests paid was left before mortgage and tax
- Planning on the old FHL tax rules: a business plan written before April 2025 may assume reliefs that no longer apply
- Missing the rates threshold: falling short of the nights-let test can move you to council tax, possibly with a second homes premium
Prefer to watch? Our video walks through eight pricing mistakes that cut holiday let income, including underestimating expenses and hidden fees (from 2:57).
Seasonality is real even in a good year. In Visit Wales' summer 2026 Tourism Barometer, 34% of tourism businesses had more visitors than the previous summer, yet operators said staying profitable was hard work because of rising costs.
Smoobu Pro Tip: Run your estimate three times, at a cautious, a likely and a strong occupancy, like the table above. If the cautious version still covers your mortgage and costs, the let is on solid ground; if only the strong one works, rethink your price or your costs first.
How to Track and Grow Your Holiday Let Income in Smoobu
An estimate is a starting point; real bookings tell you what your let actually earns. With Smoobu's statistics and reporting, you can see occupancy, revenue, nights and bookings for each property and each channel in one place.
- Connect your channels: link Airbnb, Booking.com and your other platforms through the Smoobu Channel Manager, so every booking and every calendar stays in sync
- Check your real occupancy: open Analytics and compare nights booked with the nights you made available, month by month
- Compare revenue with payouts: channels deduct their commission before they pay you, so check each channel's payout report to see what actually reaches your bank account
- Fill the quiet weeks: switch on Smoobu dynamic pricing tools to lower rates when demand drops and raise them for peaks and events, within the minimum and maximum you set
- Keep more of each booking: take commission-free direct bookings from returning guests with the Smoobu direct booking engine
- Hand clean figures to your accountant: export your bookings list and issue guest invoices with Smoobu invoicing software
For a step-by-step explanation of each number on the Analytics page, read the Help Center article on understanding your revenue and payment figures in Analytics.
Frequently Asked Questions
Once you know your numbers, the next step is improving them: our article on easy ways to increase your Airbnb income has practical ideas.
There is no single UK figure. Multiply your average nightly rate by your available nights and occupancy, then subtract fees, running costs, mortgage interest, and tax. In our illustrative two-bedroom cottage example, a 50% occupancy turned £22,500 in bookings into £9,313 before mortgage and tax.
No. The furnished holiday lettings regime ended on 6 April 2025 for Income Tax and Capital Gains Tax, and on 1 April 2025 for Corporation Tax. Holiday lets are now taxed much like other residential property, with mortgage interest relief restricted to the basic rate.
It depends on how much you let it. In England and Scotland, a let available for 140 nights and let for 70 nights pays business rates; in Wales it's 252 nights available and 182 let. Below that, you pay council tax, possibly with a second homes premium.
Fixed costs such as utilities, insurance, and repairs stay the same whether the let is busy or not. Once you cover them, most of each extra booking becomes profit. In our illustrative example, ten extra points of occupancy added £4,500 in bookings but more than £3,000 in profit.
In Scotland, yes: every short-term let needs a council license. In Wales, you must register your visitor accommodation by 31 March 2027. England plans a mandatory registration scheme, and London limits short-term letting to 90 nights a year without planning permission.
Summary: Know Your Real Holiday Let Income With Smoobu
What a UK holiday let earns depends on a realistic nightly rate, honest occupancy, and every cost in between, taxed without the old FHL reliefs. Run the numbers at three occupancy levels and check your local rules to know whether the let works before the first guest arrives.
Once you're open, Smoobu keeps your calendars, prices, and statistics in one place, so your estimate turns into real figures you can improve. Start your 14-day free trial of Smoobu today.
