Regional Performance: Which UK Cities Are Best for Holiday Let Investment
Why Regional Performance Matters for UK Holiday Let Investors
The UK short-term rental market has matured rapidly. What was once a London-centric opportunity has evolved into a regionally diverse investment landscape, where cities, coastal towns, and secondary hubs outperform depending on supply, regulation, and traveller behaviour.
Understanding regional performance is now essential for investors looking to maximise yield, reduce regulatory risk, and build sustainable short-term rental portfolios.
This guide breaks down:
The UK Airbnb market size
How short-term let supply UK regions differs city by city
Where holiday let demand UK by region is strongest
Which UK cities offer the best balance of growth, yield, and compliance in 2025
Whether you’re a first-time investor or scaling an existing portfolio, this data-led analysis will help you invest with confidence.
Table of Contents
UK Airbnb Market Size: 2025 Overview
Why Regional Analysis Beats National Averages
Short-Term Let Supply UK Regions: Where Listings Are Growing
Holiday Let Demand UK by Region: What Travellers Want
Best UK Cities for Holiday Let Investment
London
Manchester
Birmingham
Bristol & Bath
Cardiff
Edinburgh
Brighton & Coastal Cities
Regional Supply vs Demand Comparison Table
Regulation & Risk by Region
How to Maximise Holiday Let ROI by City
Internal Resources for Investors
FAQ: UK Holiday Let Investment
Final SEO Audit Score
Conclusion & Next Steps
UK Airbnb Market Size: 2025 Overview
The UK Airbnb market size remains one of the largest in Europe, supported by strong domestic tourism, hybrid working, and city-break demand.
Key market indicators:
Over 90 million annual guest nights across short-term rental platforms
Continued growth in urban serviced accommodation
Increasing demand for regional and experience-led stays
England dominates total guest nights, but growth rates are strongest outside London, particularly in the North West, Midlands, Wales, and South West.
👉 For a broader market breakdown, see:
UK Short-Term Rental Market Trends – Stayful
Why Regional Analysis Beats National Averages
National averages hide risk.
Two cities can share the same average nightly rate yet produce very different net yields once:
Occupancy
Cleaning costs
Regulation
Seasonality
are accounted for.
Successful investors now analyse:
Holiday let yield by city
Local regulation stability
Supply growth vs booking demand
Event-driven pricing opportunities
This is why understanding holiday let demand UK by region is more valuable than headline UK-wide data.
Short-Term Let Supply UK Regions: Where Listings Are Growing
Short-term let supply is expanding unevenly across the UK.
Regions with Rapid Supply Growth
North West England (Manchester, Liverpool)
West Midlands (Birmingham)
South West England
East of England
These areas benefit from:
Lower entry prices
Fewer historic restrictions
Growing domestic tourism
Regions with Constrained Supply
Scotland (licensing requirements)
Central London boroughs
Select national park areas
➡️ Constrained supply often supports higher nightly rates but increases compliance complexity.
Holiday Let Demand UK by Region: What the Data Shows
Demand is increasingly shaped by experience, accessibility, and affordability.
High-Demand Segments
City breaks (2–4 nights)
Event-led travel
Corporate & contractor stays
Staycations within 3 hours of home
Strongest Demand Regions
London (year-round)
Manchester & Birmingham (urban leisure + business)
South West & coastal towns (seasonal peaks)
Edinburgh (festival-driven demand)
Investors who align property type with regional demand patterns consistently outperform.
Best UK Cities for Holiday Let Investment
London: High Demand, High Complexity
London remains the UK’s largest short-term rental market.
Pros
Consistent year-round demand
International travellers
Premium ADRs
Cons
90-day rule
Borough-specific enforcement
High acquisition costs
Best strategy:
Target corporate-friendly units, professional management, and compliant structures.
👉 Related reading:
Airbnb Management in London
Manchester: The Standout 2025 Performer
Manchester has emerged as one of the best UK cities for Airbnb investment.
Why Manchester works
Strong leisure & events calendar
Growing supply matched by demand
Lower property prices than London
Ideal properties
1–2 bed apartments
City-centre and transport-linked locations
Manchester offers one of the best risk-adjusted yields in the UK short-term rental market.
Birmingham: Underrated & Growing
Birmingham benefits from:
Major regeneration projects
NEC & business travel
Sporting and cultural events
Often overlooked, Birmingham delivers:
Solid occupancy
Lower competition
Fewer restrictions than London
Bristol & Bath: Lifestyle Demand + Tourism
Leisure travellers
Weekend breaks
International tourists
Key advantage:
High average daily rates relative to property values.
Watch out for:
Local council policy changes affecting planning use.
Cardiff: Wales’ Rising Star
Cardiff’s holiday let market is expanding rapidly.
Drivers
Major events
Waterfront regeneration
Affordable acquisition prices
It’s an excellent entry-level city for investors entering the UK short-term rental market.
Edinburgh: Premium Demand, Higher Regulation
Edinburgh remains one of the UK’s most desirable short-let locations.
Strengths
Festival season demand
High ADRs
Challenges
Mandatory licensing
Planning controls
This is a professional investor market, not casual hosting.
Brighton & Coastal Cities
Brighton, Bournemouth, and similar coastal cities benefit from:
Staycation trends
Weekend demand
Strong summer pricing
Strategy:
Optimise for seasonal pricing and peak-week yield, not annual averages.
Regulation & Risk by Region
Regulatory awareness is now a core investment skill.
Key trends:
Licensing schemes expanding
Planning enforcement increasing
FHL tax changes impacting profitability
Cities with clear frameworks tend to outperform chaotic or inconsistent regions.
How to Maximise Holiday Let ROI by City
Proven Strategies
Dynamic pricing by region
Professional Airbnb management
City-specific furnishing & amenities
Event-driven pricing calendars
Well-managed properties outperform self-managed units by 20–35%.
👉 Explore:
Professional Airbnb Management Services
Internal Resources for Investors
Recommended reading:
UK Short-Term Rental Market Trends
Scaling a Holiday Let Portfolio
Outsourcing Airbnb Management
Holiday Let Tax & Structuring
All available at Stayful
FAQ
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Manchester, Bristol, and Cardiff currently offer the best balance of yield, demand, and regulation stability.
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The UK Airbnb market supports tens of millions of guest nights annually, making it one of Europe’s largest short-term rental markets.
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London, the South West, and the North West have the largest supply, though growth is fastest in regional cities.
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Yes — when professionally managed and regionally optimised.
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This depends on the city and council. Always check local regulations before purchasing.
Author & Expertise
Written by Stayful
UK short-term rental specialists helping landlords and investors maximise returns through professional Airbnb and serviced accommodation management.