Beyond the typical hotspots, are there any specific smaller towns or coastal areas in the UK projected to see a significant uplift in demand for short-term lets or serviced accommodation in 2025, driven by changing tourism trends?
Quick Answer
Look for smaller towns or coastal areas with strong 'staycation' appeal, growing outdoor tourism, and good local infrastructure to identify potential short-term let hotspots beyond traditional destinations in 2025.
## Emerging UK Short-Term Let Locations for 2025
While established tourist destinations always hold appeal, smart investors are now looking at smaller towns and coastal areas set for significant growth in short-term lets and serviced accommodation by 2025. These emerging hotspots are driven by shifts in tourism, including the continued 'staycation' trend and a desire for more authentic, nature-focused experiences. Here are some characteristics and examples of areas to consider:
* **Accessible Rural Retreats**: Areas within a 1-2 hour drive of major urban centres, but offering a distinct break from city life, are seeing increased demand. Think of towns on the fringes of National Parks or Areas of Outstanding Natural Beauty, like those in the **Peak District (e.g., Bakewell, Matlock)** or the less-travelled parts of **Northumberland (e.g., Alnwick, Bamburgh)**. Investors are finding that guests are willing to pay a premium for properties offering high-quality finishes and unique experiences. A well-executed refurbishment on a three-bedroom property in Bakewell, costing around **£20,000-£30,000 for a kitchen, bathroom, and decor refresh**, could realistically increase nightly rates by 20-30%.
* **Coastal Gem Renaissance**: Beyond the traditional Cornwall and Brighton, coastal towns with unique character and ongoing regeneration are catching eyes. Consider places like **Margate or Hastings in Kent**, or **Scarborough in North Yorkshire**. These areas offer a blend of traditional seaside charm with a burgeoning independent arts and food scene. They attract a younger, more affluent demographic seeking weekend breaks. A property bought for £250,000 in one of these areas, assuming no first-time buyer relief and applying the 5% SDLT surcharge (as it would be an additional dwelling), would incur **£12,500 in stamp duty costs alone**, highlighting the need for strong income projections.
* **Activity-Specific Hubs**: Locations that cater to growing niche tourism markets like cycling, hiking, water sports, or even stargazing are becoming attractive. Towns near new mountain bike trails, surfing spots, or designated Dark Sky Reserves can see a spike in bookings. An example could be **Machynlleth in Mid-Wales**, close to mountain biking trails, or certain areas in the **Yorkshire Dales** appealing to hikers. Properties here often benefit from features like secure bike storage or drying rooms, which are relatively low-cost additions but command higher nightly rates from satisfied guests.
## Potential Pitfalls to Watch Out For
While the potential for growth in these emerging areas is real, a smart investor must be aware of potential downsides and regulatory changes that could impact profitability.
* **Over-Saturation**: As certain areas gain popularity, the market can quickly become saturated. Research local short-term let supply and demand thoroughly before committing. A sudden influx of similar properties might drive down nightly rates or occupancy.
* **Local Opposition & Regulation**: Smaller communities, often not accustomed to high volumes of tourists, can sometimes experience 'overtourism' and may introduce stricter local regulations or even outright bans on short-term lets. Always check local council planning policies and proposed changes before investing. The abolition of Section 21 and Awaab's Law requirements for damp and mould, though more applicable to long-term rentals, show an increasing trend towards stronger tenant (guest) protections and landlord responsibilities.
* **Capital Gains Tax (CGT) Changes**: If you are investing in a second property, be mindful of CGT. The annual exempt amount has been reduced to £3,000 for capital gains. Higher/additional rate taxpayers face a 24% CGT rate on residential property gains, meaning a significant chunk of any profit from property appreciation could be lost if you decide to sell.
* **EPC Requirements**: While currently a minimum 'E' rating is required, the proposed 'C' rating by 2030 for new tenancies (under consultation) means you need to factor in potential energy efficiency upgrade costs. This could be a significant hidden cost if not planned for.
## Investor Rule of Thumb
Don't chase a trend; seek out areas with sustainable growth drivers, strong local infrastructure, and a unique identity that attracts specific, recurring visitor types.
## What This Means For You
Most landlords don't lose money because they miss out on a hotspot, they lose money because they invest without a clear strategy and understanding of market dynamics. If you want to know how to identify these emerging areas and assess their true investment potential, this is exactly what we dissect inside Property Legacy Education.
Steven's Take
The market is always changing, and while the major cities and traditional holiday spots will always attract investors, the real opportunity often lies in looking beyond the obvious. My success didn't come from finding the 'next big thing' but from understanding underlying economic and social shifts. The 'staycation' trend isn't going anywhere fast, but the nature of it is evolving. People want unique experiences, local authenticity, and connection with nature, alongside good local amenities. Find areas that tick these boxes and you're onto a winner, but always, always do your due diligence on projected income against operating costs and potential legislative hurdles.
What You Can Do Next
Research local council websites for planning policy changes or proposed short-term let regulations in your target areas.
Analyse demand in potential locations using platforms like AirDNA, looking for consistent growth in bookings and average daily rates.
Visit the area to assess infrastructure, local amenities, and the unique selling points that would attract short-term renters (e.g., proximity to national parks, coastal features, local events).
Calculate potential Stamp Duty Land Tax (SDLT) liabilities, remembering the 5% additional dwelling surcharge for investment properties.
Factor in potential EPC upgrade costs to meet future 'C' rating requirements for new tenancies, even if it's currently under consultation.
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