Cornwall Holiday Lets Gross 10.3%, but Costs Flip the Verdict

Estimates for a typical 3-bedroom house. Figures are modelled from market data; not guaranteed outcomes.

Holiday lets gross roughly 144% more than buy-to-let in Cornwall, but operating costs are more than double. After expenses, buy-to-let delivers the stronger net yield. The gap narrows or reverses for operators who can sustain above-average occupancy.

Holiday Let Only Beats Buy-to-Let Above 20% Occupancy in Cornwall

Holiday letting only outperforms buy-to-let if occupancy exceeds 20%. That is the break-even point where holiday let gross revenue matches the annual buy-to-let rent of £12,501. Cornwall's average occupancy sits at 50%, comfortably above break-even on a gross basis, but the higher cost structure means you need to push well past that threshold to win on net income.

Occupancy is the single biggest variable in holiday let returns. Buy-to-let income is essentially fixed once tenanted, but holiday let income swings dramatically with bookings. Here is what that looks like in Cornwall at different occupancy levels, using the market's average nightly rate of £192:

• At 35% occupancy: gross revenue drops to around £21,915, barely matching buy-to-let gross rent and leaving holiday let deeply unprofitable after costs
• At 50% occupancy (market average): gross revenue reaches £31,439, ahead on gross but behind on net
• At 60% occupancy: gross revenue rises to roughly £37,788, where holiday let begins to compete on a net basis

Cornwall is heavily seasonal. Summer months fill quickly, but winter occupancy can drop sharply outside popular coastal towns. Properties near year-round attractions or with strong shoulder-season appeal will perform closer to the higher scenario; inland cottages relying solely on peak summer will land near the lower end.

Yields Vary by Over a Full Point Across Cornwall's Postcode Areas

Cornwall's county-wide averages mask substantial variation at the postcode level. The difference between the highest and lowest yielding areas spans over a full percentage point, which on a property worth £303,831 translates to thousands of pounds in annual income.

Top postcode areas ranked by gross buy-to-let yield.

The highest-yielding areas tend to be more affordable market towns and inland postcodes where lower purchase prices push the yield calculation higher. Coastal postcodes around Padstow, St Ives, and Falmouth command premium prices that compress yields, even though absolute rents may be higher. These are averages per postcode area. The dashboard breaks it down further, by bedroom count and property type, so you can model your specific property.

Cornwall's Holiday Let Costs Absorb Most of the Gross Advantage

The 144% gross revenue premium that holiday letting enjoys over buy-to-let disappears once you account for operating costs. Holiday let annual expenses come to approximately £15,127, compared with £8,135 for buy-to-let. Here is where the money goes:

Holiday let costs:

• Airbnb host fee at 15.5% of bookings: roughly £4,873/year
• Letting agent fee at around 22%: around £6,917/year
• Insurance (specialist holiday let cover): approximately £1,432/year
• Maintenance (including furnishing replacement from guest turnover): around £3,676/year
• Utilities (paid by the owner, not the guest): roughly £2,088/year

Buy-to-let costs:

• Letting agent fee at around 11%: included in total
• Landlord insurance: approximately £584/year
• Maintenance: lower than holiday let due to less turnover
• Utilities: tenant's responsibility (£0)
• Council tax: typically the tenant's responsibility (£0 to investor). During void periods, the landlord pays council tax.

For holiday let properties, the property may be assessed for business rates rather than council tax, and many qualify for Small Business Rate Relief, reducing this cost to £0. This is worth confirming with Cornwall Council before purchase.

After all costs, buy-to-let nets approximately £4,366 per year (1.4% net yield), while holiday let nets around £16,312 (5.4% net yield). The cost differential is the entire story in Cornwall: what looks like an easy win for holiday letting on the top line becomes a loss at the bottom line for average operators.

No Night Cap in Cornwall, but Planning Rules Still Apply

Cornwall sits outside Greater London, so the 90-day rule does not apply. There is no regulatory cap on the number of nights a property can be let as a holiday let. The modelled 330 available nights per year accounts for realistic maintenance gaps and turnover, not any legal restriction.

That said, investors should not assume a frictionless path. Cornwall Council may require planning permission for a change of use from residential dwelling (C3) to holiday let, particularly in areas where the council is concerned about housing supply. Several Cornish parishes have been vocal about the impact of holiday lets on local housing availability, and planning scrutiny has increased. Check with Cornwall Council's planning department before committing to a holiday let conversion.

No permit is currently required, and there is no specific lodging tax on holiday lets in Cornwall (the STR tax rate is 0.0%). This regulatory environment is permissive compared with many UK markets, but the political mood is shifting towards tighter controls. Investors should factor in the possibility of future restrictions when modelling long-term returns.

After Tax, Buy-to-Let's Advantage Holds in Cornwall

Since the abolition of the Furnished Holiday Lettings (FHL) tax regime in April 2025, holiday lets and buy-to-let are taxed equivalently. The FHL tax advantage has been removed, making the financial comparison between holiday letting and buy-to-let more important than ever.

Key tax considerations for Cornwall investors:

• Mortgage interest relief: restricted to a 20% basic rate tax credit for both holiday lets and buy-to-let. Higher-rate taxpayers cannot deduct mortgage interest in full; this applies equally to both strategies and compresses net returns further for leveraged investors.
• Stamp duty: a surcharge applies on additional property purchases. The surcharge rate is 5% in England. Transaction costs are complex, banded, and change frequently; check current rates with your solicitor before purchase.
• Capital gains tax: residential property disposals are taxed at 18% (basic rate) or 24% (higher rate) from October 2024. With the FHL regime gone, holiday let properties no longer qualify for business asset disposal relief.
• Allowable expenses: repairs, insurance, letting agent fees, and maintenance are deductible against rental income for both strategies. Holiday let owners can additionally claim utilities since they bear that cost directly.

The tax treatment no longer favours either strategy. The decision rests purely on operating returns, which in Cornwall currently favour buy-to-let for the typical investor.

Cornwall Yields Sit Below the South West and National Averages

Comparison of key investment metrics.

Cornwall's gross buy-to-let yield of 4.2% sits below both the South West regional average of 4.3% and the national average of 5.7%. Rents are lower than the regional and national medians, while sale prices sit slightly below the South West average but above the UK-wide figure. The combination produces a yield that makes Cornwall a middle-of-the-road buy-to-let market by national standards.

For holiday letting, Cornwall benefits from being one of the UK's strongest domestic tourism markets. The average nightly rate of £192 reflects strong seasonal demand, particularly from Easter through to October. However, the seasonal concentration means the county-wide occupancy of 50% includes significant low-season voids that drag down the annual average. More on our data sources.

Devon faces similar yield dynamics as a neighbouring tourism market. Properties priced in Cornwall's range of £219,431 to £538,716 offer a wide spectrum of investment profiles, from affordable inland cottages to premium coastal homes.

Investment Bottom Line for Cornwall

Cornwall presents a clear split. On gross revenue, holiday lets win comfortably, grossing 144% more than buy-to-let. On net income, buy-to-let wins because holiday let operating costs (insurance, platform fees, letting agent fees, utilities, higher maintenance) consume most of the extra revenue. The abolition of the FHL tax regime removes the last tax incentive that previously tipped the scales towards holiday letting.

The exception is operators who can consistently achieve occupancy well above the 50% average. At 60% occupancy, holiday let gross revenue reaches approximately £37,788, which begins to overcome the cost differential. Properties in prime coastal locations with year-round appeal (Falmouth, St Ives, Padstow) are the most likely candidates for above-average performance.

With 315 postcode areas across the county, the right answer depends entirely on which specific area and property type you are considering. The county average obscures enormous variation.

Data reflects market conditions as of April 2026. Read our scoring methodology.

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.