Top 8 UK Airbnb Markets to Invest
The United Kingdom (UK), which includes England, Scotland, Wales, and Northern Ireland, is one of the world’s most popular tourist destinations. It attracts tourists from all over the world, particularly from North America and Europe, with its thriving cities, picturesque countryside, history, rich culture, and delectable food. It is also home to a number of excellent Airbnb markets with substantial investment potential.
Why invest in Airbnb vacation rental properties?
Thriving Market
Airbnb’s short-term vacation rental market is growing and is projected to reach demand levels that would have been anticipated had the pandemic not halted growth. In comparison with other sectors of the travel industry, it has flourished despite the pandemic. As of April 2021, demand levels have already surpassed those of 2019 levels.
Higher Returns
In the right markets, Airbnb short-term vacation rentals provide higher returns than long-term rentals.
Less Risk
Because you are not reliant on a single tenant, you diversify your exposure to the risk of not being paid rent. Additionally, short-term guests are easier to evict if ever necessary.
Get a Vacation Home for Your Own Use
As the owner of a short-term vacation rental on Airbnb, you can reserve your property for your own use and use it as a vacation home. Saves you the cost and you can enjoy living in it whenever you prefer!
Investing in Diverse Assets
Airbnb short term vacation rental properties can be an excellent entry point for real estate investment. Even if you already own other real estate properties, investing in short term rentals helps diversify your assets because the market for short term rentals is distinct from other types of real estate.
Pays Your Mortgage Off
The income from your Airbnb short-term vacation rental can cover the mortgage, making it an excellent entry point into investing. As the income is higher, the mortgage can be paid more quicker as compared to a BTL investment model.
Tax Benefit
According to the tax law, owners of rental properties that are operated as a business can deduct both mortgage interest and rental-related business expenses.
Accessible Audience
With OTAs like Airbnb accounting for a significant portion of the travel market, marketing and attracting short-term renters is easier than ever. Even generating direct reservations has become less difficult.
What to Consider When Selecting a Market for Short-Term Vacation Rentals on Airbnb?
Location
Is the location an appealing tourist destination? Does it attract a variety of guests, including business travelers and families?
Property Type
The type of guests you can attract will depend on the type of property you acquire. If the property is a studio apartment, it will attract business travellers or tourists, and a 2-bedroom or 3-bedroom apartment will most likely attract families.
Buy vs. Rent
You can either purchase the property or benefit from the Airbnb market and utilise it for rent to serviced accommodation.
Year Round Demand
Make sure that your vacation rental is marketed all year round with the activities, festivals, and events distributed across the months.
Rate of Return
The goal of any investment is the rate of return and Airbnb properties tend to generate higher rates of return as compared to BTLs.
Laws
How complicated are the regulations governing Airbnb vacation rentals in the area? Take into account the numerous applicable taxes, laws, and regulations e.g. “the 90-day rule.” Although Airbnb will gather and send certain taxes to the relevant authorities in particular areas, it is the host’s responsibility to comply with all laws.
Top 8 Airbnb Markets to Invest
in the UK
Bradford
Bradford is more than just the UK’s curry capital. This West Yorkshire city and metropolitan borough, named after Bradford Cathedral, is the world’s first City of Film, as designated by UNESCO, and home to numerous film festivals. It is home to the highest fountain in the United Kingdom, the City Park Mirror Pool, and Fountain, as well as the Victorian model village and UNESCO World Heritage Site Saltaire. A city that juxtaposes the old and the new, it is brimming with culture, incredible architecture, breathtaking scenery, and the youngest population of any city in Europe.
Bradford, according to a study by international payment experts RationalFX based on AirDNA and ONS data, is the most popular place to live in the United Kingdom.
Monthly average revenue: £1,229
Annual occupancy rate (June 2021): 83%
Median home value (December 2020): £135,000
Swansea
Swansea has everything: legendary beaches, historical attractions, picturesque seaside villages, and a thriving arts scene. Along its coastline, this Welsh city offers sand dunes, rock pools, and secluded wildlife refuges, as well as sports tourism activities such as surfing, kayaking, coasteering, and gorge walking. It is also home to the Glynn Vivian Art Gallery, the Swansea Indoor Market, which offers renowned Welsh delicacies, the legendary Swansea Grand Theatre, which hosts a variety of events, renowned Welsh ice cream parlors, and dramatic landscapes such as Gower Peninsula. Swansea is also a popular family vacation destination.
According to research conducted by international payment specialists RationalFX using data from AirDNA and ONS, in Swansea:
Monthly average revenue: £1,100
Annual occupancy rate (June 2021): 62%
Median home value (December 2020): £143,500
Stoke
The city of Stoke-on-Trent is affectionately known as The Potteries and is renowned for its creativity, particularly in ceramics. It also features world-class museums, award-winning gardens, and a monkey forest where visitors can stroll among free-roaming Barbary macaques. The world’s ceramics capital also offers a variety of opportunities to experience ceramic production, including factory tours and opportunities to create your own ceramics. There are also parks, a lake, and sufficient attractions and activities to attract tourists throughout the year.
According to research conducted by international payment specialists RationalFX using data from AirDNA and ONS, in Stoke:
Monthly average revenue: £1,030
Annual occupancy rate (June 2021): 48%
Median home value (December 2020): £151,000
Plymouth
Plymouth allows visitors to follow in the footsteps of notable residents such as Charles Darwin, Sir Francis Drake, and, of course, the Mayflower Pilgrims. As the UK’s Ocean City, it offers numerous water sports, such as sailing, kayaking, canoeing, paddleboarding, powerboating, scuba diving, and even yacht racing on occasion. It hosts annual events such as the Pirates Weekend and the British Firework Championship, which attract tens of thousands of visitors. It is also home to the Plymouth Gin Distillery, the original home of Plymouth Gin and the oldest operating distillery in England, the United Kingdom’s largest aquarium, the art deco Tinside Lido, one of Europe’s best outdoor swimming pools, art galleries, and independent cinema.
According to research conducted by international payment experts RationalFX using data from AirDNA and ONS, the following are true in Plymouth:
Monthly average revenue: £1,200
Annual occupancy rate (June 2021): 70%
Median home value (December 2020): £197,000
Belfast
Belfast, the capital of Northern Ireland, is a tourism hub in Europe. Through historic bars and contemporary clubs, visitors can enjoy an abundance of nightlife. It is also home to one of Europe’s most popular tourist attractions, the Titanic Belfast, a museum dedicated to the tragic ship that was constructed in the city’s docks. Meanwhile, two Harland and Wolff cranes, Samson and Goliath, dominate the city’s skyline. Black Cab tours of the city, St. George’s Market, Cathedral Quarter, Belfast Castle, a stroll along River Lagan, and Game of Thrones tours are also popular with tourists. Belfast is also recognised as one of the world’s finest food destinations.
According to research by international payment specialists RationalFX based on data from AirDNA and ONS, the following are true in Belfast:
Monthly revenue: £764
Annual occupancy rate (June 2021): 57%
Median home value (December 2020): £128,300
Birmingham
Birmingham, which happens to be one of the fastest-growing regions over the next five years, is more than just the site of the 2022 Commonwealth Games. It has more Michelin-starred restaurants outside of London than anywhere else in the United Kingdom. Visitors are spoiled for choice. Its canal network makes for a pleasant stroll with canalside bars and shops. There are beautiful gardens and tearooms, such as Castle Bromwich Hall Gardens, stunning shopping malls, trendy bars, a variety of museums, and independent and international music venues. It is a haven for sports and sporting venues, most notably for football, cricket, and tennis.
Using data from AirDNA, in Birmingham:
Average occupancy rate: 71%
Median home value: £214,695
Manchester
Manchester, one of England’s most vibrant cities, provides a plethora of dining options, creative opportunities, and intriguing architecture. It is also home to one of the most popular football clubs in the world, Manchester United. The city’s nightlife is fueled by trendy bars serving delicious cocktails and craft beer. It has designer department stores, high street stores, and independent boutiques to accommodate all types of shoppers, hosts the Manchester Christmas markets, and has a thriving arts community. It is also an excellent base for exploring the nearby moors, mountains, coastlines, and green forests.
Using data from AirDNA, in Manchester:
Occupancy rate average (August 2021): 71%
Monthly average revenue (Oct 2021): £1,700
Liverpool
Liverpool is one of the most architecturally significant cities in the world, with buildings dating back to the 1500s. Albert Dock, a former port, contains the greatest number of listed buildings in the United Kingdom. In addition, there are numerous art galleries, museums, restaurants, and bars. Liverpool is also home to the same-named Premier League football club and numerous Beatles attractions. The city offers a wide variety of cuisines and settings, including the highest restaurant in the United Kingdom and a converted church.
Using data from AirDNA, in Liverpool:
Occupancy rate average (August 2021): 71%
Average monthly revenue (August 2021): £2,000
