Costs of Running a Holiday Let in the UK: A Line-by-Line Guide
The costs of running a holiday let in the UK go well beyond the mortgage. Owners pay for cleaning, insurance, safety checks, utilities, booking fees and tax. Since April 2025, holiday lets are taxed like other residential lets, so every cost line now matters more.
This guide lists each running cost, splits fixed costs from the ones that rise with bookings, and shows how tax rules treat them. It does not quote average prices, because costs vary by property and region. Instead, it points to the official rule behind each line so owners can build their own budget.
Key Takeaways
Each year, a UK holiday let owner pays for things like the mortgage, insurance, cleaning, energy, safety checks, booking fees and council tax.
Since 6 April 2025, the furnished holiday lettings tax regime has gone, so owners get mortgage interest relief only at the 20% basic rate.
HSE says rented holiday cottages, flats and caravans with gas need a yearly gas safety check by a Gas Safe registered engineer.
A holiday let in England pays business rates, not council tax, only if it was open for 140 nights and let for 70 last year.
With ChargeAutomation, check-in, payments and door codes run on their own, so owners can save up to 30 minutes per booking.
What Are the Costs of Running a Holiday Let Each Year?
Holiday let costs fall into two groups: fixed costs and variable costs. Fixed costs are paid whether or not guests book, such as mortgage interest, insurance, council tax or business rates, broadband and software. Variable costs rise with each stay, such as cleaning, laundry, guest supplies, energy and booking fees. Splitting them this way shows how many nights you need to break even.
Insurance is a fixed line that standard home cover may not handle. GOV.UK guidance for England says owners should have dedicated holiday let insurance and public liability cover. Buildings and contents cover should also suit short-term letting. Ask each insurer how it treats guest damage and lost bookings.
Booking fees are usually the largest variable line. Airbnb says most hosts on its host-only fee structure pay 15.5%, taken from the payout. Holiday letting agency costs vary by service level and are set out in each agency's contract. Some agencies only market the property, while others also run changeovers and guest messages.
The cost of furnishing a holiday let is mostly a set-up cost, but replacements come round every year. Beds, linen, kitchenware and appliances wear out faster with guests than in a family home. HMRC's replacement of domestic items relief can cover like-for-like replacements of furniture, appliances and kitchenware.
A full list of holiday let ownership costs usually includes these lines:
Mortgage interest and lender fees
Holiday let insurance and public liability cover
Council tax or business rates
Gas, electricity, water and broadband
Cleaning, laundry and guest supplies
Booking platform or agency fees
Repairs, safety checks and replacements
Software, accountancy and TV or music licences
Which Safety, Licence and Tax Costs Apply to Holiday Lets?
Safety checks are fixed costs that owners cannot skip. HSE guidance lists rented holiday accommodation, such as cottages, flats and caravans, under landlord gas safety duties. That means an annual gas safety check by a Gas Safe registered engineer. In England, GOV.UK also points owners of small properties to its fire safety guidance for paying guest accommodation.
Smaller licence costs add up too. GOV.UK says a TV Licence may be needed if you provide TVs, and a music licence may be needed for live or recorded music. Owners must also check whether the property needs an EPC. A national short-term let register for England is expected to begin in March 2027.
Council tax or business rates depends on how often the property is let. In England, a holiday let is a self-catering business only if it was open 140 nights and let 70 nights last year. Owners who let one property with a rateable value under £15,000 may get small business rate relief. Full relief applies at £12,000 or less.
Running a holiday let business now follows normal landlord tax rules. GOV.UK says the furnished holiday let tax regime was abolished on 6 April 2025, so tax on holiday lets works like any other rental. Furnished holiday let allowable expenses now follow the same HMRC rules, and mortgage interest relief is limited to the 20% basic rate. VAT registration is needed once taxable turnover passes £90,000 in 12 months.
HMRC lists costs involved in holiday letting that can count as allowable expenses, such as:
Repairs and upkeep
Water rates, council tax, gas and power
Landlord insurance
Letting and management fees
Accountant's fees
Mortgage interest, at the basic rate
Like-for-like new beds, sofas and white goods
How ChargeAutomation Cuts the Costs of Running a Holiday Let
ChargeAutomation cuts the time cost of each booking, which is the hidden line in owning and running a holiday cottage. Online check-in, ID collection and digital rental agreements run from one link, with no app for guests to download. Properties can save up to 30 minutes per booking and may reach up to a 93% online check-in completion rate.
Card fees are another cost line ChargeAutomation can trim. STRPay, its built-in processing powered by Airwallex, adds a flat 0.3% margin over interchange and processing costs. Owners can also connect one of 130+ payment gateways, such as Stripe or Adyen. Scheduled charges and automatic retries help stop failed payments turning into lost income.
Damage and key handovers cost money as well. ChargeAutomation can place security deposit pre-authorisations on direct bookings, or offer guests a Damage Waiver instead. Most Airbnb hosts cannot charge their own deposit, so these tools suit direct bookings and channels that allow them. Smart lock codes from 40+ providers, such as RemoteLock and Keynest, are created and removed automatically.
ChargeAutomation also exports bookings and transactions to XLSX or CSV for your accountant. It links with 50+ PMS platforms, including Lodgify, Hostaway and Eviivo, and it is free to start with no contract. Launch your online check-in at chargeautomation.com.
Holiday let owners use these ChargeAutomation tools to keep costs down:
Online check-in with ID and selfie verification
Digital rental agreements with e-signatures
STRPay processing at 0.3% over interchange and processing costs
Automated payment schedules and failed payment retries
Security deposit holds or a Damage Waiver on direct bookings
Smart lock codes from 40+ providers
XLSX and CSV reports for your accountant
Frequently Asked Questions
What are the costs of owning a holiday cottage in the UK?
The main costs are mortgage interest, insurance, council tax or business rates, utilities, cleaning, safety checks and booking or agency fees. There is no single figure, because each cost depends on the property, the area and how you let it. Build your budget from real quotes and bills rather than national averages.
Can I claim a holiday as a business expense if I own a holiday let?
No, not a personal holiday. GOV.UK says expenses must be wholly and exclusively for renting out the property, and personal costs cannot be claimed. Where a cost is only partly for the letting, you can deduct the letting part. Ask an accountant how to split costs for weeks you stay there yourself.
What are holiday let management costs if I use an agency?
Holiday let management costs depend on the level of service you choose. A marketing-only agency costs less than a holiday let management company that also runs cleaning, changeovers and guest messages. Ask for a written list of every fee, including VAT, before you sign.
Do I need a gas safety certificate for a holiday cottage?
Yes, if the holiday cottage has gas appliances. HSE guidance covers rented holiday accommodation such as cottages, flats and caravans. Landlords must arrange an annual gas safety check by a Gas Safe registered engineer.
Can I still deduct holiday let running costs after April 2025?
Yes, most running costs still count if they are wholly and exclusively for the letting. Since 6 April 2025, holiday lets follow the usual landlord rules. The main change is that owners get mortgage interest relief only at the 20% basic rate of Income Tax.
