The Real Costs of Buying a UK Holiday Home: What I Paid and What You Should Expect

When I started exploring the idea of buying a second property, I was excited about weekends by the sea and the idea of some extra rental income. But the more I researched, the more I realised that the costs of buying a UK holiday home aren’t always obvious.

Between taxes, surveys, insurance, and setting the place up, the total outlay added up fast. If you’re thinking of buying a holiday cottage or a seaside bolthole, here’s a complete breakdown of what I paid — and what you should budget for too.

Why Buy a UK Holiday Home?

Personal Use and Passive Income Potential

I wanted a place where my family could escape to for weekends, but I also wanted to let it out when we weren’t using it. A holiday home that doubled as a short-term rental felt like the ideal solution — personal enjoyment plus potential profit.

Growing Demand for Domestic Holiday Lets

Since the pandemic, UK-based holidays have surged. Staycations became the norm, and suddenly holiday lets were in high demand — especially in Cornwall, the Lake District, and coastal Wales.

My Motivation for Buying One

The idea of having a cottage I could both use and rent out just made sense. But before jumping in, I knew I had to understand the true costs of buying a UK holiday home — not just the property price.

What Are the Upfront Costs of Buying a UK Holiday Home?

There are a few obvious costs, and a few hidden ones that surprised me.

Property Price and Location Differences

I viewed places from Devon to the Yorkshire Dales, and the range was huge. A modest two-bedroom cottage could be £150,000 in one region or £400,000+ in another.

Deposit Requirements

Because it’s a second property, most lenders ask for a 25–40% deposit. On a £300,000 home, that’s £75,000 to £120,000 upfront.

Stamp Duty on Second Homes

Second homes in the UK carry a 3% surcharge on top of standard Stamp Duty rates. For example:

• On a £250,000 holiday home, I paid around £10,000 in Stamp Duty.

• Higher-value properties can rack up £20,000+ easily.

Conveyancing and Solicitor Fees

Legal costs were fairly standard: around £1,500, including:

• Property searches

• Land registry

• Contracts

• Disbursements

Survey and Valuation Costs

I opted for a HomeBuyer’s Report at £450, plus my lender’s valuation fee of £300. If the property had been older or listed, I would’ve gone for a Full Structural Survey, which costs £600–£1,200.

Mortgage Broker and Arrangement Fees

I used a broker to secure a holiday let mortgage. Broker fee: £500. Mortgage arrangement fee: another £999 added to the loan.

Table – Example Upfront Costs of Buying a UK Holiday Home

What Are the Ongoing Costs of Owning a UK Holiday Home?

Once the keys are yours, the expenses don’t stop.

Mortgage Repayments and Interest Rates

Holiday let mortgage rates are typically higher than standard residential, around 5–7% as of 2024. My repayments on a £200,000 mortgage come in at £950–£1,100/month, depending on fixed/variable terms.

Insurance (Holiday Let Insurance)

Expect to pay £300–£600 annually for specialist cover that includes:

• Public liability

• Accidental guest damage

• Loss of income due to cancellations

Council Tax or Business Rates

• If your property is available to let for 140+ days/year, you may qualify for business rates instead of council tax.

• Discounts and exemptions apply — mine came to about £800/year.

Utility Bills and Internet

Even when vacant, I still pay:

• Electricity/Gas: £80–£120/month

• Broadband: £30–£40/month

• Water/Sewage: £25–£40/month

Property Management and Cleaning Costs

Because I live hours away, I use a local agency:

• Full management: 20–25% of booking income

• Changeover cleaning: £40–£60 per stay

Maintenance, Repairs, and Refurbishment

I set aside £1,000–£1,500/year for:

• Boiler servicing

• Painting

• Broken fixtures

• Appliance repairs

Marketing and Booking Platform Fees

I list on:

• Airbnb (15% fee)

• Booking.com (15–18%)

• Sykes (up to 20–25%) if I use their marketing services

Are There Any Hidden Costs I Didn’t Expect?

Licences and Local Restrictions

In some areas, especially the Lake District and parts of Wales, you’ll need change-of-use planning permission or a local letting licence.

Travel Costs and Second-Home Logistics

Regular trips for maintenance or check-ins can rack up hundreds in fuel, parking, and hotel stays.

Tax Advice and Accountant Fees

To properly claim furnished holiday let tax benefits, I hired a property accountant. That added £400–£700/year but saved me even more in reliefs.

Recap – Key Costs to Budget Before Buying a Holiday Home

Upfront Costs Summary

• Deposit

• Stamp duty

• Legal, survey, and mortgage fees

• Furnishings and setup

Monthly and Annual Ongoing Costs

• Mortgage repayments

• Utilities

• Management and maintenance

• Marketing and platform fees

Build in a Buffer

I’d recommend keeping at least £5,000–£10,000 aside for the unexpected.

Final Thoughts – Was Buying a UK Holiday Home Worth It?

Honestly? Yes — but only because I did the maths first.

The costs of buying a UK holiday home are more than just the listing price. It’s the combination of upfront and ongoing costs that really determine if this is a wise investment or a financial drain.

If you’re thinking of buying, I highly recommend running the numbers, planning for downtime, and talking to other owners. Done right, it can be a rewarding source of income — and a personal escape that feels priceless.

FAQs – Costs of Buying a UK Holiday Home

Is It Cheaper to Buy a Holiday Home in Scotland or Wales?

Often yes. Property prices are generally lower, but legal processes differ (especially in Scotland), and rules about second homes can be stricter.

How Much Do Furnishings and Setup Cost on Average?

I spent just over £8,000 for a 2-bed setup. Expect to spend £5,000–£15,000+, depending on size and luxury level.

Are There Grants or Tax Breaks for Holiday Let Owners?

Furnished Holiday Lets qualify for mortgage interest relief, capital allowances, and business rate exemptions (if eligible).

Can I Get a Regular Mortgage or Do I Need a Holiday Let One?

If you intend to let it out, most lenders will insist on a holiday let mortgage. Rates are higher, but terms are tailored.

How Do I Budget for Low Season or Gaps in Bookings?

I planned for 2–3 months of no income annually, just to be safe. Build a buffer into your budget.