Updated: May 27, 2021
The UK domestic holiday market has always been big business with people keen to explore the many national parks, diverse landscapes, miles and miles of breathtaking coastline, castles, cathedrals and numerous areas of outstanding natural beauty that the country has to offer. In recent years however, with uncertainty around Brexit travel requirements and now on-going international travel restrictions arising from the Covid-19 pandemic, the staycation market is booming. And with an increasing appetite for more environmentally-friendly, closer-to-home holidays, coupled with a surplus of disposable income for many, this is a trend that is likely to continue for some time to come.
Do log cabins make for good holiday lets?
The short answer to this is yes! And this is particularly true if your site is befitting of the log cabin vernacular - think woodland settings and rural locations where a log cabin would nestle effortlessly into its surroundings. When people think of forest locations in particular, this is likely to be the type of accommodation they envisage as they look for a world away from the suburban street many call home for the rest of the year. Indeed, the big holiday booking companies and websites cite ‘unique stays’ as some of the most sought-after properties on their books as people increasingly look for memorable, experiential vacations. For that reason, log cabins and other unusual options such as windmills, yurts, converted barns etc. attract some of the highest occupancy rates and therefore best potential investment yields of all holiday lets.
And the robust nature of log cabins means they are generally fairly resilient to the higher level of wear and tear typically seen in holiday lets where there tends to be more coming and going, people are perhaps a little less careful which walls they bump and often with more people in a smaller space than at home. A robust interior can reduce your cosmetic maintenance costs compared to a modern apartment with pristine white walls for example.
What cabin types are the best holiday lets?
There is no correct answer to this question, but very small cabins such as those that can only accommodate a couple, or very large log homes that require several generations or families to joint book, are likely to have the lowest general demand (unless you are specifically targeting these markets of course - the ‘tiny house movement’ is one that seems to be gathering pace!). It is therefore better to aim for the broadest appeal with cabins that can take a typical family, a group of friends, two couples or two generations. Two or three-bed cabins [back link] with flexible bed configurations are likely to see the most interest and therefore highest occupancy rates.
For simplicity when it comes to planning permission, our range of mobile log cabins have been designed to conform to the same requirements as caravans which should make the process of acquiring planning consent a little more straightforward and could be a good place to start looking.
Things to think about when planning log cabins as holiday lets
The single biggest thing to consider is location which can make or break your success as a holiday let owner. Proximity to a place of particular interest, beach or national park for example is likely to determine the level of interest you receive which can drive up demand, the prices you can command and in time, your name as a great place to stay, with possible repeat business. There are also other factors to consider such as access to walking trails, pubs, restaurants and other places of interest. This is particularly true if you’re building in a part of the UK not typically known for sub-tropical weather!
Budget is also a significant consideration if your principal aim is to maximise return. A relatively quick post and beam construction comes with a lower price tag than a fully-hand scribed saddle notch cabin, but you may also be able to charge a higher rate for the latter. You need to carefully consider how many weeks of the year you’re likely to have paying guests in your cabins, what sort of prices you can charge and what sort of outgoings you are likely to encounter - remember, unlike buy-to-let properties you are still responsible for paying the utility bills, insurance and incidentals such a broken crockery etc. Mortgages on holiday let properties are also far harder to come by than those for residential dwellings or even assured shorthold tenancy (AST) buy-to-lets, so you may need to consider alternative financing. Read our overview of self-build mortgages here.
While there are many other factors to consider such as marketing, internal fixtures and fittings, vehicular access, licences and health & safety etc, one other significant factor that you should think about at the outset is how to differentiate yourself from any competition in the area. If there are other log cabins or similar properties reasonably close by, how are you going to stand out from the crowd? Our design team [back link] plan bespoke cabins from scratch which means that if you can dream it, we can probably build it!
What are the financial advantages of holiday lets?
Compared to buy-to-let properties, holiday lets can be significantly more profitable and in peak season in a location of high demand, you may be able to charge for a week what an AST tenant might pay in a month. You do need to allow for quieter periods of the year when your cabins may be empty, although there are of course various incentives you can employ to entice visitors outside of peak times.
Let’s use a three bedroom post and beam cabin costing around £150,000* as an example to demonstrate how these compare in terms of yields.
On a long-term AST basis and depending on where in the country your property is located you might charge £800 a month for an equivalent three-bed property. That’s £9,600 a year and would give you a yield of 6.4%.
Assuming the above rule and in a 10-week peak season over the summer you charge £800 per week, followed by £550 a week in an 8-week shoulder season and £400 a week in a 16-week annual off-peak season, that gives you a total annual income of £18,800 or a very healthy 12.5% yield before costs and taxes - almost double the buy-to-let yield. And that is despite the cabin being empty for 18 weeks of the year. On top of that of course, you can always use the cabin yourself in these empty periods, saving you more money on your own holiday costs elsewhere!
*Sealed shell stage only. Additional internal fittings and costs will apply.
For tax purposes, holiday lets are considered businesses meaning you may be able to take advantage of certain business rate relief incentives, offset various running and maintenance costs, and benefit from business rates rather than the council tax that buy-to-let properties are subject to. We highly recommend you speak to a qualified accountant before embarking on your project as this will help you plan your outgoings, potential yields and may therefore inform your initial investment. There are also occupancy rate requirements to meet in order to qualify as a true holiday let, so it is worth doing your homework before you start.
With potential double-figure annual yields and the undeniable joy of owning log cabins as holiday lets, it’s little wonder that many of the cabins we have built have been for this purpose. As with all these things there’s a bit of homework to do before you start, but once you’ve done that we are here to help with the design, build and installation to get your new holiday let log cabin venture under way!
Where to stay in a British Log Cabin
If you're considering your own holiday let venture and looking for inspiration, or simply looking to put your feet up and relax in one for a few nights (and who wouldn't?!), then these are some of the holiday let cabins we have built around the UK: