{"id":5442,"date":"2025-11-30T12:48:12","date_gmt":"2025-11-30T12:48:12","guid":{"rendered":"https:\/\/www.schofields.ltd.uk\/blog\/?p=5442"},"modified":"2025-12-02T15:43:33","modified_gmt":"2025-12-02T15:43:33","slug":"holiday-let-costs","status":"publish","type":"post","link":"https:\/\/www.schofields.ltd.uk\/blog\/5442\/holiday-let-costs\/","title":{"rendered":"Holiday Let Expenses and How to Reduce Them"},"content":{"rendered":"Reading Time: <\/span> 10<\/span> minutes<\/span><\/span>

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\nRunning a holiday let can be enjoyable and rewarding, but before you venture into holiday letting, you need to ensure your business will be a viable success. To make it successful and generate a good profit, you need to consider the main expenses so you can work out your finances realistically.<\/p>\n

Here, we\u2019ll detail the most common holiday home costs you\u2019ll need to factor in, so you can draw up a budget, work out your holiday let running costs and avoid potential surprises further down the line. And to help, we\u2019ve split any potential outgoings into \u2018setup\u2019, \u2018weekly\u2019 and \u2018monthly\/annual costs.\u2019<\/p>\n

These expenses will vary depending on the size of your property \u2013 but we\u2019ve based them on a 2-bed holiday cottage.<\/p>\n

Setup costs for holiday lets<\/strong><\/span><\/h2>\n

Holiday let mortgage payments<\/strong><\/span><\/h3>\n

If you own your holiday let outright, this significantly reduces your expenses. But many holiday lets are mortgaged and require monthly repayments.<\/p>\n

Holiday let mortgage<\/a> interest rates are significantly higher than those for a regular home loan, with a typical fixed rate for 2 years being approximately 5%. Additionally, lenders ask for a 25% deposit of the value of the loan.<\/p>\n

Holiday let stamp duty costs<\/strong><\/span><\/h3>\n

When purchasing a second home in England and Northern Ireland, a higher rate Stamp Duty Land Tax (SDLT) applies. The charge works on a tiered basis from 5% and increases in relation to the value of the property.<\/p>\n

Cost of furnishing a holiday let<\/strong><\/span><\/h3>\n

Although there is a significant upfront cost to furnishing your holiday let<\/a> to a high standard, it will ensure your property stands out from the competition and appeals to potential guests.<\/p>\n

Consider allocating funds for popular features that are likely to earn you more revenue. Holiday lets with a hot tub generally earn 49% more than those without, and adding an open fire could increase your earnings by 19%.<\/p>\n

Budget \u00a315,000<\/strong> to kit out and furnish your property, but features such as a hot tub could set you back an extra \u00a33-\u00a36k.<\/p>\n

Weekly costs of running a holiday let<\/strong><\/span><\/h2>\n

The more bookings you have, the higher your overheads will be, but this will be offset against the increased income. Here we highlight some of the most common costs you will need to consider on a weekly basis when letting your holiday home.<\/p>\n

Holiday let agency management costs<\/strong><\/span><\/h3>\n

Even if you\u2019ve got the most attractive holiday let in the UK, if it doesn\u2019t get exposure, it\u2019s not going to get booked up. Unless you are managing everything yourself, you will need to\u00a0enlist the help of a holiday let management company<\/a>.<\/p>\n

Using a holiday letting agent to manage your property will come at a cost, but it can also free up considerable time. The fee and commission rate you pay depend on the level of service you choose.<\/p>\n

Startup costs<\/strong>: Some agents charge \u00a3100-\u00a3250 when signing up to take photos of the property and set up the website listing.<\/p>\n

Commission fee<\/strong>: Typically, the fee you can expect to pay ranges from 15% \u2013 25% (plus VAT)\u00a0<\/strong>per booking. Sometimes, fully managed service fees are bundled in with the commission to cover every aspect of your holiday cottage management from the bookings to the cleaning and laundry, maintenance, key collection and emergency call outs. This may make the fees higher.<\/p>\n

Management fee<\/strong>: Alternatively, some agencies charge a lower commission and separate fees for additional services. For example, fixed fees for a maintenance callout, cleaning or laundry.<\/p>\n

Annual cost<\/strong>: Like the setup fee, some agencies charge a fee every year to cover the cost of keeping your website listing and photos up to date.<\/p>\n

Holiday let changeover and cleaning costs<\/strong><\/span><\/h3>\n

First impressions count for everything when it comes to holiday letting. The cleanliness of your holiday let is paramount and can mean the difference between a great review and a negative one. So, ensuring your holiday cottage is immaculately clean for arriving guests is essential.<\/p>\n

If you aren\u2019t using a management agency, do not have the time or don\u2019t live near your holiday let, you\u2019ll need to hire a professional cleaning service for changeovers.<\/p>\n

For a two-bed holiday cottage, holiday let cleaners<\/a> typically charge between \u00a310-\u00a320<\/strong> an hour or \u00a350-\u00a3100<\/strong> for cleaning and laundry, <\/strong>allowing 5 hours for the\u00a0changeover<\/a>.<\/p>\n

Depending on the cleaner, you might have to allow \u00a3100<\/strong> for the set-up cost of equipment and \u00a320<\/strong> a month to replace these items in busy holiday homes. It is also important to factor in \u00a3200<\/strong> for deep cleaning once a quarter.<\/p>\n

Crisp, clean and high-quality linen is also essential. Although many cleaning companies offer a laundry service, you might find that it\u2019s more cost-effective to handle the laundry yourself. If you are doing it yourself, you need to consider whether your facilities for cleaning the laundry are adequate. There\u2019s also the additional costs for the washing, drying, ironing and buying 3 sets of everything.<\/p>\n

An alternative is to outsource your linen hire and laundry to a company that ensures laundry is cleaned to a professional standard. Hiring linen also means that you avoid the initial cost of buying multiple sets of bedding and towels, and the worry of replacing items that get worn or damaged.<\/p>\n

A two-bedroom property sleeping four guests roughly costs \u00a360<\/strong> per changeover for linen hire but it depends on the number of items.<\/p>\n

Welcome pack costs<\/strong><\/span><\/h3>\n

It\u2019s the small personal touches that make a big impact and, a welcome pack<\/a> is one way to make a great first impression and make guests feel appreciated.<\/p>\n

A welcome pack doesn\u2019t have to blow the budget, how much you choose to spend is entirely up to you. Items typically include the essentials such as milk, bread, tea, coffee, eggs, biscuits, local cheese or luxury toiletries to make the stay an even more enjoyable one.<\/p>\n

The average cost of a welcome pack for a 2-bed cottage will be roughly\u00a0\u00a315 \u2013 \u00a320<\/strong>\u00a0per booking. If you have a larger property or cater to the luxury higher end, including items such as luxury toiletries and treats, will cost more money.<\/p>\n

You will also need to factor in the cost of replacing regular guest supplies such as toilet rolls, washing up liquid, toiletries etc.<\/p>\n

Booking platform fees<\/strong><\/span><\/h3>\n

The popular listing sites where you can advertise your holiday home, such as Airbnb, VRBO and Booking.com, charge a booking fee which covers processing guest payments, marketing to guests, and customer support. Here\u2019s what the fees are at the time of writing.<\/p>\n

Airbnb<\/strong><\/a>
\n<\/strong>There are 2 types of fee structures on Airbnb, split fee and single fee. With the split fee, 3% is deducted from the hosts price, in addition, guests pay a 14.1% to 16.5% service fee on top of the price. With the single fee, a single service fee is deducted from the host\u2019s price. It\u2019s typically 14 to 16% and most hosts who use property management or channel management software are on a single fee.
\n
\n<\/strong>Vrbo<\/strong><\/a>
\n<\/strong>Hosts pay a 5% commission fee plus a 3% payment processing charge per booking.<\/p>\n

Booking.com<\/strong><\/a>
\n<\/strong>Commission rates range from 10% and 25% depending on factors such as location and property type, but the typical commission rate for hosts is around 15% of the total booking amount. You need to register on their website to find out what fees apply.<\/p>\n

Holiday let waste collection costs<\/strong><\/span><\/h3>\n

Household waste from your holiday let business is classified as commercial waste, and you\u2019ll have to pay for its collection rather than using the council’s household waste services.<\/p>\n

Prices typically start from around \u00a38<\/strong> per collection (plus the bin rental), depending on your location, property size and occupancy. Alternatively, some refuse collector charge approximately \u00a33<\/strong> a bag that can be collected on the changeover day, so guests arrive to empty bins.<\/p>\n

Monthly\/annual costs of running a holiday let<\/strong><\/span><\/h2>\n

Holiday let insurance<\/strong><\/span><\/h3>\n

As an owner, you need to ensure you\u2019re protecting your holiday home and guests should anything bad happen, such as a break-in, flooding, a fire or injury.\u00a0Taking out the right insurance<\/a>\u00a0for your holiday let will help you protect a major financial investment and give you peace of mind.<\/p>\n

Roughly, the average annual cost to insure a detached holiday let cottage in Cornwall: buildings sum insured \u00a3200,000 and \u00a315,000 contents, would be around\u00a0\u00a3260 a year<\/strong>.<\/p>\n

Cost of utilities and subscriptions<\/strong><\/span><\/h3>\n

As with any home, you\u2019ll have to factor the price of utilities into your holiday let running costs for services such as electricity, gas and water. Depending on the occupation rate and insulation installed, budget \u00a380-\u00a3100 per month.<\/strong><\/p>\n

High-speed wi-fi is also a deal-breaker, budget \u00a330 per month<\/strong> for fibre.<\/p>\n

Your holiday let will need to be a \u2018home from home\u2019 retreat for your guests, who will want access to streaming and TV subscriptions.
\n
\nMonthly costs<\/strong><\/p>\n