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Preston’s Growing Potential for Short-Term Let Investors
Preston is rapidly gaining recognition as an excellent choice for short-term rental investments, attracting a diverse population of approximately 7 million visitors annually. This influx includes business travellers, tourists, and students from the University of Central Lancashire (UCLan), all contributing to the increasing demand for flexible accommodation options.
More guests are choosing serviced apartments and fully furnished rentals over traditional hotels due to the comfort, privacy, and flexibility they offer. This shift reflects a broader preference for home-like environments, making temporary rentals an appealing choice for visitors seeking convenience during their stays. Investors can enjoy peace of mind with secure, well-maintained properties in prime locations across Preston.
The strategic location of Preston, nestled in central Lancashire and close to major cities like Liverpool and Manchester, enhances its attractiveness for short-term lets. Visitors can easily explore these vibrant urban centres while enjoying more affordable lodging in Preston. This location advantage positions the city as a cost-effective base for travellers, allowing them to benefit from easy access to major attractions without the high prices typically found in surrounding cities.
Preston’s economic landscape is also showing promise, with projections from Lancashire County Council indicating a consistent annual growth rate of about 1.4% over the next decade. This growth is fueled by increased business investments, new retail developments, and improved transport links, driving demand for quality housing.
As more people move to the area for work, the need for good housing continues to rise. Notably, the presence of UCLan, with over 38,000 students, provides a reliable source of short-term renters, including visiting lecturers and family members who often require accommodations for extended periods. Given these factors, Preston presents an appealing opportunity for real estate investors seeking to capitalise on the growing demand for holiday rentals in a thriving market.
Advantages of Investing in Short-Term Let in Preston
Higher rental yields than long-term lets
In Preston, holiday rentals often bring in more money than long-term renters. This place has an average renting yield of 4.4%, and in some places, like PR1, it can go as high as 7.5%. That’s well above the UK average, making it a strong choice for investors looking to maximise their earnings.
Seasonal Flexibility for Investors
One great thing about holiday rentals is that you can change the rental rates when the area is busy or when there are events. For example, more people need places to stay in Preston during college graduations, concerts and sports events. This means you can raise your rates and make more money during these busy times.
Tax Benefits and Financial Incentives
Short-term lets in the UK that qualify as Furnished Holiday Lettings (FHLs) offer a number of tax advantages that are hard to ignore. FHLs allow investors to claim full mortgage interest relief, along with capital allowances on furnishings and equipment, which can be a big help come tax time.
Also, FHLs may be eligible for Business Asset Disposal Relief, which could lower the amount of Capital Gains Tax they have to pay when they sell the property. Due to these tax breaks, temporary rentals become even more attractive for investors, helping them get the best returns and lower their tax bills on Preston properties.
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Which Properties Would be Best for Your Investment?
Here are some expert-recommended properties that promise strong rental yields and high tenant demand:
The One Residences
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Property Price
Rent From
Rental Yield
Preston's Guildhall Gardens
Located in the famous Winckley Square Conservation area, Guildhall Gardens is set to become one of the most impressive new buildings in Preston’s busy city centre. This property is in a great spot to attract renters who like a mix of old-fashioned charm and modern conveniences, thanks to Lancashire’s growing economy and Preston’s ongoing revitalisation. Ideal for professionals and couples, Guildhall Gardens offers city-centre convenience in one of Preston’s most desirable areas.
£776 pcm
250 Years
8%
Q3 2023
Key Project Highlights:
- In the heart of Winckley Square, one of Preston’s most historic and affluent areas.