Top 10 UK Airbnb Markets to Invest

Made up of England, Scotland, Wales, and Northern Ireland, the United Kingdom (UK) is one of the top 10 international tourism destinations in the world. It attracts visitors from across the world, particularly North America and Europe, offering vibrant cities, picturesque countryside, history, culture, food, and breathtaking beauty. It is also home to some great Airbnb markets with significant investment potential.

The Top 10 UK Airbnb Markets to Invest in are:

1. Bradford
2. Swansea
3. Stoke
4. Plymouth
5. Belfast
6. Birmingham
7. Manchester
8. Glasgow
9. Liverpool
10. Edinburgh

Why invest in Airbnb Short Term Vacation Rental Property?

1. Growing Market

The Airbnb short term vacation rental market is growing and is predicted to achieve demand levels it was expected to achieve had the pandemic not cut growth short. It has prospered even amid the pandemic in comparison with other sectors of the travel industry. As at April 2021, demand has already recovered beyond 2019 levels.

2. Higher Returns

Airbnb short term vacation rentals provide higher returns than long term rentals in the right markets.

3. Diversified Risk

Because you are not dependent on a single tenant, you are diversifying the risk of not being paid the rent owed to you. Short term guests are also easier to evict if ever required.

4. Gain a Holiday Home

As the owner of an Airbnb short term vacation rental, you can block the dates you want to stay in your property and enjoy it as a holiday home. This is not possible with long-term tenants.

5. Diversified Investment

Airbnb short term vacation rental properties can be a great way to begin investing in real estate. Even if you already own other real estate properties, because short term rentals are a different market to other types of real estate, investing in helps diversify your assets.

6. Pays Off Your Mortgage

The revenue you earn from your Airbnb short term vacation rental can cover the mortgage on the property making it a great entryway into investing.

7. Tax Advantage

According to federal law, owners of rental properties that are operated as a business can deduct mortgage interest on the properties as well as business expenses related to the rental.

8. Accessible Audience

With OTAs like Airbnb accounting for a significant share in the travel market, it is easier than ever to market and attract short term renters. Even generating direct bookings has become easier.

What to Look for When Picking a Market for Airbnb Short Term Vacation Rental Property?

Location

Is the location an attractive destination to visitors? Does it attract different types of guests, from business travelers to families and couples?

Type of Property

The type of property you purchase will determine the type of guests you can attract. A luxury property is expected by upmarket travelers but will put off backpackers. Or having access to high speed wi-fi will allow you to market to business travelers and digital nomads.

State of the Property

Are you looking to buy a complete property or refurbish a property in need of renovation? It’s cheaper to buy a dilapidated home but you need to take into account the cost of refurbishment, even if you plan to DIY it.

Marketability Year Round

Are there activities, sights, and events distributed across the months that allow you to keep your vacation rental marketed year round?

ROI

What’s the average price of the type of property you are looking for? What’s the average revenue? Do the math to find out the return on your investment.

Legislation

How complicated are the rules that govern Airbnb short term vacation rentals in the location? Take into account the myriad laws, regulations, and taxes that are applicable. While Airbnb will collect and remit some taxes in some locations to the appropriate authorities, the responsibility is on the host to ensure all legal requirements are being met.

Top 10 Airbnb Markets to Invest in the UK

1. Bradford

Bradford is more than just the curry capital of the UK. Named after the cathedral city of Bradford, this West Yorkshire city and metropolitan borough is the world’s first City of Film as named by UNESCO and home to many film festivals. It has the highest fountain in the UK, the City Park Mirror Pool and Fountain, that puts in a great show, as well as UNESCO World Heritage Site Saltaire, a Victorian model village. A city that contrasts the old with the new, it is brimming with culture, amazing architecture, gorgeous scenery and the youngest population of any city in Europe.

According to research by international payment experts RationalFX based on AirDNA and ONS data, in Bradford

Average monthly revenue: £1,229

Occupancy rate per year (Jun 2021): 83%

Median house price (Dec 2020): £135,000

Years of Airbnb revenue required to cover property price: 9

2. Swansea

Legendary beaches, historical attractions, picturesque seaside villages, a vibrant arts scene … Swansea has it all. This Welsh city offers sand dunes, rock pools, and secluded havens for wildlife just along its coastline as well as sports tourism activities like surfing, kayaking, coasteering, and gorge walking. It is also home to the Glynn Vivian Art Gallery, Swansea Indoor Market which offers renowned Welsh delicacies, legendary Swansea Grand Theatre which hosts an eclectic range of events, famous Welsh ice cream parlors, and dramatic landscapes like Gower Peninsula. Swansea is also a favorite destination of families.

According to research by international payment experts RationalFX based on AirDNA and ONS data, in Swansea:

Monthly revenue: £1,100

Occupancy rate per year (Jun 2021): 62%

Median house price (Dec 2020): £143,500

Years of Airbnb revenue required to cover property price: 11

3. Stoke

Affectionately known as The Potteries, Stoke on Trent is a unique city known the world over for its creativity, particularly in ceramics. It also hosts world class museums, award winning gardens and a monkey forest where visitors can walk amongst free roaming Barbary macaques in woodland surroundings. The world capital of ceramics also offers a range of opportunities to experience ceramic making, from factory tours to hands-on opportunities to create your own. There are also parks, a lake, and enough sights and activities to attract tourists all year round.

According to research by international payment experts RationalFX based on AirDNA and ONS data, in Stoke:

Monthly revenue: £1,030

Occupancy rate per year (Jun 2021): 48%

Median house price (Dec 2020): £151,000

Years of Airbnb revenue required to cover property price: 12

4. Plymouth

Plymouth is more than just a rock. Steeped in history, it allows visitors to walk in the footsteps of famous residents including Charles Darwin, Sir Francis Drake, and of course the Mayflower Pilgrims. Known as the UK’s Ocean City, it has plenty of water sports including sailing, kayaking, canoeing, paddleboarding, powerboating, scuba diving, and on occasion, yacht racing. It hosts events such as the Pirates Weekend and the British Firework Championship that draw thousands of visitors each year. It is also home to the Plymouth Gin Distillery, the original home of Plymouth Gin and the oldest working distillery in England, the UK’s largest aquarium, the art deco Tinside Lido which is one of Europe’s best outdoor swimming pools, art galleries and independent cinema.

According to research by international payment experts RationalFX based on AirDNA and ONS data, in Plymouth:

Monthly revenue: £1,200

Occupancy rate per year (Jun 2021): 70%

Median house price (Dec 2020): £197,000

Years of Airbnb revenue required to cover property price: 14

5. Belfast

The capital city of Northern Ireland, Belfast is a tourism hub of Europe. Visitors can enjoy an abundance of nightlife through historic bars and modern clubs. It is also home to one of the leading tourist attractions in Europe, the Titanic Belfast which acts as a museum for the tragic ship that was built in the city’s docks. Meanwhile, Samson and Goliath, two Harland and Wolff cranes dominate the city’s skyline. Tourists also appreciate Black Cab tours of the city, St George’s Market, Cathedral Quarter, Belfast Castle, a stroll along River Lagan and Game of Thrones tours. Belfast is also recognized as one of the best food destinations in the world.

According to research by international payment experts RationalFX based on AirDNA and ONS data, in Belfast:

Monthly revenue: £764

Occupancy rate per year (Jun 2021): 57%

Median house price (Dec 2020): £128,300

Years of Airbnb revenue required to cover property price: 14

6. Birmingham

Predicted to be one of the fastest growing regions over the next 5 years, Birmingham is more than the host of the 2022 Commonwealth Games. Home to more Michelin starred restaurants than anywhere else in the UK outside of London, it really spoils visitors for choice in dining. Its canal network makes for a great walk with canalside bars and boutiques for shopping. There are beautiful gardens and tearooms like Castle Bromwich Hall Gardens, gorgeous shopping malls, trendy bars, a multitude of museums, and independent and international music venues. It is also home to the oldest operating cinema in the UK The Electric Cinema and is a haven for sports and sporting venues, most famously for football, cricket, and tennis.

According to AirDNA data, in Birmingham:

Average daily rate (Oct 2021): £112

Average occupancy rate (Oct 2021): 71%

Average monthly revenue (Aug 2021): £1,600

According to UK property investment firm Seven Capital, in Birmingham:

Average property price: £214,696

Price growth in 5 years: 17.44%

7. Manchester

One of England’s most vibrant cities, Manchester offers no end of choices for eating out, plenty of opportunity for creativity and is full of intriguing architecture. It is also home to Manchester United, one of the most popular football clubs in the world. The city thrives at night with its hip bars serving delicious cocktails and craft beer. It has designer department stores, high street stores and independent boutiques to cater to all types of shoppers, hosts the Manchester Christmas markets, and is home to a lively arts scene. It is also a great base from which to explore the surrounding moors, mountains, coastlines and green forests.

According to AirDNA data, in Manchester:

Average daily rate (Sep 2021): £119

Average occupancy rate (Aug 2021): 71%

Average monthly revenue (Oct 2021): £1,700

According to UK property investment firm Seven Capital, in Manchester:

Average property price: £208,792

Price growth in 5 years: 20.69%

8. Glasgow

The largest city in Scotland, Glasgow is a year round travel destination. A UNESCO City of Music, it presents a platform to enjoy both emerging and established artists perform. From medieval to futuristic, Glasgow is home to an eclectic mix of architecture, the Doctor Who tour, Riverside Museum, Glasgow Botanic Gardens and plenty of other free attractions. It is also wallet friendly with regards to its culinary offerings -- dishes from around the world with a sprinkle of Scottish charm. On top of a much talked about nightlife it also has an array of museums covering an assortment of spaces. The city is particularly suited for families and solo travelers.

According to AirDNA data, in Glasgow:

Average daily rate (Oct 2021): £160 Aug

Average occupancy rate (Aug 2021): 79%

Average monthly revenue (Oct 2021): £1,600

According to UK property investment firm Seven Capital, in Glasgow:

Average property price: £204,007

Price growth in 5 years: 17.01%

9. Liverpool

Liverpool is one of the best cities in the world for architecture with buildings originating from as far back as the 1500s still standing. A former docking port, Albert Dock has the largest collection of listed buildings in the UK. It is also packed with galleries, museums, restaurants, and bars. Liverpool is also home to the Premier League football club of the same name and plenty of Beatles attractions. The city offers fantastic dining options from culinary genres to settings including the UK’s highest restaurants to a converted church.

According to AirDNA data, in Liverpool:

Average daily rate (Aug 2021): £133

Average occupancy rate (Aug 2021): 71%

Average monthly revenue (Aug 2021): £2,000

According to UK property investment firm Seven Capital, in Liverpool:

Average property price: £188,948

Price growth in 5 years: 17.03%

10. Edinburgh

One of the most walkable cities in the world, Edinburgh is packed with monumental architecture, stunning views, and an amazing nightlife brimming with underground bars, traditional Scottish pubs, nightclubs, sophisticated whiskey bars, and fun cocktails. It hosts 12 major annual festivals alone including the Edinburgh Film Festival, Book Festival and Hogmanay and is home to film locations of many popular movies. Visitors can see the iconic Edinburgh Castle, St Giles Cathedral, National Galleries of Scotland, and the Edinburgh Dungeon, board Britannia - the former official ship of the Queen, and stroll down the main street of Royal Mile, breathing in history and heritage while sipping coffee and shopping to your heart's content. There are also amazing parks including the royal Holyrood Park.

According to AirDNA data, in Edinburgh:

Average daily rate (Aug 2021): £142 Aug

Average occupancy rate (Aug 2021): 84%

Average monthly revenue (Aug 2021): £2,587

According to UK property investment firm Seven Capital, in Edinburgh:

Average property price: £316,791

Price growth in 5 years: 17.65%

Key Takeaway

Do your research. There are great Airbnb vacation rental podcasts that provide expert information on investing in short term rental markets in the UK and elsewhere. Take into consideration the myriad factors that impact Airbnb vacation rentals in your chosen markets before making your decision. If you are also interested in investing in other markets, also consider Airbnb markets in the US, Mexico, Spain, and Australia.