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A well-managed holiday home can provide a low risk return on investment and provide you with a beautiful country retreat.

Here at Character Cottages, we believe that buying a holiday home in the Cotswolds can be a financially rewarding and interesting investment.

If you are considering making such an investment, read our guide below.

1. Are holiday homes a good investment?


As with any investment decision, there are a number of pros and cons to consider:


  • A well-managed holiday home should generate good levels of annual income for the owner
  • UK residential property has consistently been an excellent long term investment opportunity.
  • Holiday homes with an abundance of character are more resilient to market downturns.
  • UK holiday home letting currently has a number of tax benefits.
  • Owning a holiday home gives, you, your friends and your family the opportunity to use the property at times that you choose
  • Owning a holiday home in a beautiful location is overall likely to be a more interesting investment.


  • Managing a holiday home is much harder work than, for example, investing in a “buy-to-let” or buying stocks and shares
  • Negative Feedback and taking it personally.

2. What are the risks of buying a holiday home?

Feature Image - Towns and Villages in the Cotswolds

The risks associated with buying a holiday home are generally similar to those associated with buying any other home.

  • As with any property, you should be comfortable that you are able to meet the costs of any finance payments on the property.
  • UK residential property has consistently been an excellent long term investment opportunity.
  • Whilst unlikely, there are a number of unforeseen circumstances that may suddenly prevent you from letting out your holiday home.
  • Damage to the property such as flooding or broken pipes.

We can provide advice on suitable processes and insurance policies to mitigate these risks.

3. What do I need to think about when buying a holiday home?


There are obviously many things to consider when buying a holiday home. However, from the perspective of making a good investment, there are a few key things to think about.

  •  The price of the property will almost certainly be dictated by the general residential property market. However, some properties will be able to generate a higher return than others, as a holiday let, for the same purchase price.
  • Considerations on living spaces and if property has a garden
  • What facilities is the property near (eg. pubs, restaurants, shops, children’s playground, tourist attractions, etc.)
  • Is the property away from busy roads and noisy or industrial premises?
  •  Does the property have character features, such as exposed beams, inglenook fireplaces, Agas?
  • How are you funding the purchase of the property? If you are taking out a mortgage, would you be better off raising funds against your main house, rather than against the holiday home?

There is no absolute right or a wrong answer as to what makes a perfect holiday home. Different properties in different locations will appeal to different people.

However, there are a lot of things to think about in order to maximise your investment returns.

We have lots of experience of the holiday home market and can help ensure that the decisions you make are the right ones for you.

4. What about holiday let mortgages?

Market Square Stow on the Wold

For a long time, there has been confusion and poor understanding about the availability of holiday let finance for cottages.

Many traditional brokers are unclear about the differences between business loans, holiday let finance, and buy to let mortgages.

Property owners are often told, wrongly, that holiday let mortgages are only available as an expensive form of commercial finance which must be repaid under normal banking terms, like a 5 year repayment loan at 6% per annum.

Character Cottages has secured a relationship with Holiday Cottage Mortgages. HCM are a specialist online mortgage broker created specifically to help existing and new holiday let property owners secure affordable mortgage finance on their prized holiday homes.

Founded by holiday letting experts, HCM brings together a broad and deep understanding of the holiday letting industry.

5. How do I go about letting my holiday home?

At Character Cottages, we specialise in letting luxury holiday homes, with the objective of maximising each owner’s profit. Further details on how we can help you are provided in the Let Your Cottage section, or call us on 01451 600844.