Turning your home into a holiday let can be a great way to boost your income and make the most of a property you’re not using year-round. If you’ve been wondering “can I rent my house out as a holiday let,” the answer is yes – but there are rules, permissions, and practicalities to consider first.

Whether you’re listing on Airbnb, working with an agency, or managing everything yourself, this guide walks you through the legal, tax, and insurance essentials for UK homeowners, buy-to-let landlords, and second-home owners so you can start with confidence.

Why Turn Your Home Into a Holiday Let?

Holiday lets offer a different proposition to traditional long-term rentals:

• Higher earning potential – In many tourist hotspots, weekly rates for short-term stays can far outstrip monthly rents from a single tenant.
• Flexibility – You can block out dates for your own use, making it easy to enjoy the property between guest bookings.
• Varied guest base – From couples’ weekend getaways to family summer holidays, you can tailor your marketing and pricing to different groups across the year.

For property investors and landlords, holiday lets can also diversify your portfolio and reduce reliance on a single long-term tenancy agreement.

Do You Need Permission to Run a Holiday Let?

Planning permission rules in the UK

If your property is already operating as a holiday let, and you’re not making physical changes, you usually won’t need planning permission as there’s no “change of use.”

However, if you’re converting a residential home, annexe, or outbuilding into a holiday let, you may need planning permission for a material change of use. This is especially true if it’s the first time the property is being used in this way.

Regional differences

• In London, residential properties are limited to 90 nights of short-term letting per calendar year without planning permission.
• Coastal areas and popular tourist destinations may have stricter rules to manage housing availability for locals.

Council approvals and bylaws

Some councils are introducing short-term let registration schemes or creating specific planning “use classes.” Always check with your local planning authority before marketing your property – rules can vary widely.

Mortgage and Lease Restrictions to Check

• Buy-to-let vs residential mortgages
  Not all mortgage products allow short-term letting. If you have a residential or buy-to-let mortgage, read your terms carefully and contact your lender.
• Getting lender consent
  You may need to switch to a holiday-let mortgage or get written consent to avoid breaching your agreement. Lenders may also want reassurance about your insurance and management arrangements.
• Leasehold property restrictions
  If your property is leasehold, the lease may prohibit short-term or holiday letting entirely or require freeholder approval. Ignoring these rules can lead to legal disputes and even forfeiture.

Holiday Let Insurance Requirements

Standard home insurance won’t cover the risks of paying guests. A specialist UK holiday let insurance policy is essential to protect your investment.

A good insurance for holiday lets policy should cover:

• Public liability if a guest is injured or their property is damaged.
• Accidental and malicious damage by guests.
• Loss of rental income if the property becomes uninhabitable after an insured event.
• Employers’ liability if you hire cleaners or maintenance staff.

It’s not just about meeting lender requirements – it’s about protecting your income and avoiding large out-of-pocket expenses.

Tax Rules for Holiday Lets

The Furnished Holiday Let (FHL) status from 2025

For the 2025 tax year, the UK government is abolishing the special tax regime for Furnished Holiday Lettings (FHLs). The changes take effect from 6 April 2025 for income tax and capital gains tax, and from 1 April 2025 for corporation tax and corporation tax on chargeable gains.

From these dates, holiday lets will no longer receive favourable treatment and will instead be taxed under the same rules as standard residential rental properties.

Key changes:

• Abolition of FHL regime: Holiday lets will be treated like ordinary residential lettings for tax purposes.
• Loss of tax reliefs: Benefits such as capital allowances, finance cost restriction exemptions, and certain capital gains tax reliefs will no longer apply.
• Profit allocation rules: Jointly owned holiday lets by married couples or civil partners will default to a 50:50 profit split, unless a valid Form 17 is submitted.
• Loss relief: Losses from holiday lets can now be offset against other property income, unlike under the old rules, where they were restricted to future FHL profits.
• Mortgage interest: Relief will be limited to a 20% tax credit on mortgage interest, mirroring standard rental property rules.
• Capital gains treatment: From 6 April 2025, holiday lets will lose their “business” status for capital gains tax, meaning reliefs such as Business Asset Disposal Relief (BADR) may no longer be available.

What this means for owners

These changes are likely to result in higher tax bills and altered treatment of holiday let income. Owners should review their property portfolios and tax planning strategies, considering whether properties remain commercially viable or whether disposal before the rule change makes sense.

Setting up Your Property for Guests

Furnishings & amenities

Holiday let guests expect a fully furnished property, including kitchen equipment, bedding, towels, and entertainment options. Think about your target audience – families might value travel cots and stair gates, while couples might prioritise a hot tub or log burner.

Cleaning and maintenance routines

Build in time between bookings for a professional clean and routine checks. Well-maintained properties get better reviews and fewer complaints.

Guest information packs

Include practical details (Wi-Fi codes, appliance instructions, bin collection days) alongside recommendations for local attractions, restaurants, and transport.

Marketing Your Holiday Let

Use major portals
List on Airbnb, Vrbo, and other holiday rental sites to tap into a huge audience. These platforms handle bookings, payments, and some guest communications.

Create a direct booking website
A simple, professional site can help you avoid platform fees and build repeat business. Include professional photography, an availability calendar, and a secure payment option.

Invest in high-quality visuals
Professional photos capture the property’s vibe, helping you stand out in search results. Include shots of both the interiors and local highlights.

Tailor your descriptions
Write for your ideal guests. Mention nearby beaches for coastal properties, walking trails for countryside cottages, or nightlife for city apartments.

Key Takeaways Before You Start

• Check local rules first – Planning permission, bylaws, and registration schemes can vary by council.
• Review your mortgage and lease terms – Breaching them could cause major problems.
• Get specialist insurance – Standard home cover won’t protect you against holiday let risks.
• Plan for the tax changes in 2025 – The FHL advantages won’t be around forever.
• Invest in presentation – Well-equipped, well-marketed properties earn more and keep guests coming back.

Common mistakes to avoid:

• Starting without the right permissions.
• Underestimating running costs and changeover time.
• Neglecting insurance – or assuming your home policy is enough.

Conclusion

Turning your home into a holiday let can be a rewarding venture, but success starts with getting the essentials right. From planning permission and mortgage consent to specialist insurance and guest-ready presentation. By understanding the legal, financial, and operational requirements, you’ll protect your investment and maximise your returns.

At Policy Powerhouse, we make finding the right UK holiday let insurance simple, fast, and affordable – so you can focus on welcoming guests, not worrying about cover. Speak to our friendly experts today and get a bespoke quote that protects your property, your income, and your peace of mind.

FAQs

Can I turn my main home into a holiday let?
Yes, but you may need planning permission, lender consent, and specialist insurance. If you’re based in London, remember the 90-day short-term let limit without planning approval.

How many days can I rent my property as a holiday let?
Outside London, there’s no national limit, but some councils impose restrictions. To qualify for FHL status before April 2025, you’ll need at least 210 days available and 105 days let per year.

Do I need a licence to run a holiday let?
Licensing requirements vary – some councils have mandatory registration for short-term lets. Always check local rules.

What is the difference between a holiday let and a buy-to-let?
A holiday let is rented for short stays, often to multiple guests throughout the year, and needs to be fully furnished. Buy-to-let is typically a long-term rental to a single tenant or household.

Can I stay in my own holiday let?
Yes, but be aware that personal use reduces the number of days available for letting and could affect your eligibility for tax reliefs under the FHL regime.