Cornwall Holiday Lets Net 4.9% After Costs vs 1.4% Buy-to-Let

The gross holiday let premium in Cornwall reaches 147% for a 3-bed house, but after every operating cost is deducted the picture narrows considerably. This article works through the real after-costs numbers for both a 3-bed house and a 2-bed apartment, because the cost structures diverge in ways that change the answer: apartments add service charges that houses never pay, but they also enter the market at a fraction of the price.

The 3-Bed House: Holiday Let Nets £14,799, Buy-to-Let Nets £4,324

A typical 3-bed house in Cornwall sells for around £303,831. Run as a holiday let it grosses £30,936 per year at 47% occupancy and £200 a night. Run as a buy-to-let it grosses £12,501 after a vacancy haircut to 97%. The operating costs land as follows.

Note: Airbnb is not the only platform a Cornish holiday let owner will use. The 15.5% host-only fee applies to Airbnb bookings. Vrbo typically charges around 8% per booking on its commission model, while Booking.com sits closer to 15%. Direct bookings through your own website carry no platform fee, which is why many established Cornish operators run a multi-channel mix.

What Eats the House Premium

Three line items absorb most of the gap between holiday let and buy-to-let revenue on a Cornwall house. Airbnb fees alone strip £4,795 off the top, more than the entire annual letting agent fee a buy-to-let landlord would pay. Holiday let insurance runs at £1,432 versus £584 for standard landlord cover, reflecting the higher liability exposure of paying guests. Maintenance and furnishings, bundled into £5,296 for the holiday let figure, sit well above the £3,676 a long-let landlord would budget for routine repairs.

Utilities deserve a closer look in Cornwall specifically. Holiday let utilities of £2,340 are paid by the owner because guests expect heating, hot water and broadband included in the nightly rate. A buy-to-let tenant pays their own bills, so the landlord side shows a much smaller utilities figure. In a coastal county where electric heating dominates and winter occupancy is uneven, owners often find their actual utility bill exceeds the model.

The 2-Bed Apartment: Service Charges Reshape the Maths

A 2-bed apartment in Cornwall sells for around £183,422, roughly 60% of the price of a 3-bed house. Lower entry price is the apartment's biggest advantage, but service charges are its biggest hidden cost.

The service charge of £1,735 appears on both sides of the apartment table because it is a property-level charge owed to the freeholder regardless of whether the flat is short-let, long-let or empty. Many Cornish leasehold flats also carry a separate ground rent, which is not modelled here. Owners should request the last three years of service charge accounts before exchanging contracts, because reserve fund top-ups for re-roofing or external decoration can spike a normally predictable cost by several thousand pounds in a single year.

House vs Apartment: Lower Entry Price, Higher Recurring Costs

Apartments win on capital outlay but lose ground on recurring costs. The entry price gap is significant: £183,422 for a 2-bed apartment versus £303,831 for a 3-bed house frees up capital for either a deposit on a second property or a furnishing budget that runs higher than the house equivalent. On gross revenue, however, the apartment generates less per pound invested because tourist demand in Cornwall skews toward family-sized accommodation, and a 2-bed flat typically sleeps four where a 3-bed cottage sleeps six.

The decisive factor is service charges. The apartment carries an additional £1,735 per year that the house simply does not pay, and that charge applies whether the flat is empty, let to a tenant or running at peak summer occupancy. On the holiday let side, the house nets 4.9% versus the apartment at 4.7%. On the buy-to-let side, the house yields 1.4% compared with the apartment at 1.3%. The direction of the comparison matters more than the exact margin: a 3-bed Cornish house is the stronger after-costs investment under both rental strategies, but an apartment with a low service charge in a high-demand harbour town can flip that conclusion. The dashboard shows postcode-level breakdowns so you can compare specific Cornish areas rather than relying on a county median.

Holiday Let Breaks Even at 19% Occupancy

The gross break-even occupancy for a Cornwall holiday let is 19%, meaning the property only needs to be booked for that share of available nights to match what it would have grossed as a long-term let. The Cornwall market median sits at 47%, which is well above the break-even floor but well below what owners often quote when pitching the asset class. Treat 19% as the floor below which a holiday let underperforms a long let, not as a target.

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Hiring a Professional Manager Costs Roughly £6,806 a Year

The tables above assume self-management, which is the dashboard's default and reflects what most Cornish owners actually do for their first property. Outsourcing changes the maths significantly. For a 3-bed house, hiring a holiday let agency to handle bookings, guest communication, key handover and cleaning coordination adds around £6,806 per year, equivalent to roughly 22% of gross revenue. That brings the holiday let net yield down from 4.9% to 2.6%.

Whether the manager fee is worth paying depends on geography and time. For an owner who lives in Cornwall and can drive to the property within an hour, self-management is feasible and saves the full £6,806. For a London-based investor buying a coastal cottage they cannot service themselves, a managing agency is effectively a fixed cost of doing business, not an option. Established Cornish managers such as Cornish Cottages, Classic Cottages and Sykes Holiday Cottages operate under varying commission structures, so request a full breakdown of additional charges (linen, cleaning, marketing, listing fees) rather than relying on the headline percentage alone.

Tax Implications After the FHL Abolition

The Furnished Holiday Letting tax regime was abolished from 6 April 2025, which removes the capital allowances, pension-eligible earnings treatment and full mortgage interest deductibility that holiday let owners previously enjoyed. Holiday lets and buy-to-let properties are now taxed on broadly equivalent terms, with mortgage interest restricted to a basic rate (20%) tax credit rather than a deduction against rental profits. This shift has eliminated one of the historical reasons for choosing a holiday let structure over a standard buy-to-let in Cornwall, making the operating cost comparison shown above more decisive than it would have been two years ago.

Stamp duty on second homes and buy-to-let purchases carries a 5% surcharge above the standard rates, applied to the full purchase price. On a Cornwall property at £303,831 this is a meaningful upfront cost that should be confirmed with your solicitor based on current bands. Outside Greater London there is no statutory 90-night cap on holiday letting, but converting a property to short-let use may require planning permission for change of use, and Cornwall Council has been reviewing its position on holiday let registration in tourism-pressured areas. Verify current planning requirements for the specific parish before committing to a holiday let strategy.

Data reflects market conditions as of May 2026.

For broader methodology context, see the market score methodology and data sources pages, or explore rental data in the dashboard.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.