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Farm diversification - holiday let

For farmers across the country, times are undoubtably challenging – but the resourceful nature of people in the industry mean many are counteracting their hardship with exciting new projects. Diversification, in many forms, will help farmers to survive and thrive in the coming years, as subsidies disappear, and costs remain high. Many are contemplating ways to do things differently, and we believe diversification into holiday letting could be key to the lasting success of family-run farms…

Whether you have an unused plot of land, or barns in need of a little TLC, this could be the basis for an exciting and profitable new business venture! Converting these unused assets to provide holiday accommodation will not only stop these areas of the farm from becoming dilapidated but will also provide a source of valuable income for years to come.

Your Guide to Farm Diversification Into Holiday Letting

Here, we have developed a comprehensive guide on farm diversification into holiday letting. From tips and advice on every stage of the process, to insights from industry professionals, we hope this will help any farmer thinking of taking steps to boost their income, and supplement their farming enterprise. The sections our guide covers are below:

Types of holiday accommodation

Here at Coast & Country Cottages we market and manage a host of successful farm diversification holiday homes. From shepherd’s huts to log cabins, barn conversions to safari tents, we have seen it all!

Whilst the size, style and offering may differ, customers choosing these properties are all looking for one thing in common; the space, peace and tranquillity a farm stay in South Devon can bring.

We would suggest you think about what your site is best suited to and the type of guests you plan to attract. Pods are wonderful for couples, perhaps looking to enjoy a walking break, whilst safari tents lend themselves to family breaks due to their larger size.

You might imagine self-catering breaks would be most popular with families, but notably a massive 40% of our bookings are from couples, so it’s perhaps unsurprising that shepherd’s huts and the like – which often accommodate just two – book exceptionally well.

Lodges, glamping and Shepherds huts are especially popular in our area – the term ‘Devon lodges’ has an average of 6,600 searches per month, 84% above this time last year. ‘Devon glamping’ has 3,600 average monthly searches, while ‘Devon shepherds huts’ has 720.

Holiday let planning permission

Planning permission requirements vary depending on the property type that you wish to let.

The likelihood is that if you decide to convert barns or build log cabins, shepherd’s huts or glamping pods for holiday accommodation, they will require planning permission. However, if a structure is only temporary, such as a yurt or tipi and you don’t intend to run your site for more than 28 days a year, planning permission isn’t always required.

Do you need planning permission for a shepherd’s hut?

The short answer to this question is yes, if your shepherd’s hut is being used to make money, you will need planning permission.

You may not need planning permission for your shepherd’s hut if it’s for personal use as it’s likely to be portable, but holiday letting your shepherd’s hut will require ‘change of use’ permission for the land it sits on. We suggest contacting a professional agent like Luscombe Maye for more information about your specific situation.

It’s always best to speak to a planning professional to get the most up-to-date information on planning and which laws apply to you. We spoke to the Rural Planning Department at Luscombe Maye, who offered this advice:

“Acquiring the adequate planning permission for your venture is your very first requirement. In the countryside, planning policy usually restricts residential development to the following:

• Barn conversions
• Agricultural/rural worker’s dwellings
• ‘Enabling’ development
• The sub-division of existing houses
• Outstanding/ innovative development

In essence this means farmers looking at undertaking building development to provide a holiday let will be primarily looking at either converting a barn, dividing an existing farmhouse or building a new home which is particularly innovative.

If we can gain consent for an unrestricted residential dwelling – through a traditional barn conversion via a Full application or a Class Q Permitted Development right application – this allows a full residential use whether that is occupied by the owner, let out on an Assured Shorthold Tenancy or a holiday let for self-catering purposes. As you can appreciate, gaining a full residential permission gives the maximum value as it gives the most flexibility to future occupation. However, sometimes Local Planning Authorities will not support a full residential use due to the location of the barn in question.”

Whilst gaining full consent for an unrestricted residential dwelling can sometimes be tricky, with each farm situation and location being unique, we would suggest you employ a professional agent like Luscombe Maye to visit and give a full and thorough explanation of your options.

The Luscombe Maye Rural Professional team go on to say:

“We are on-hand to provide expert planning advice and prepare planning applications for a variety of proposals. Including new dwellings, barn conversions, diversification schemes, equestrian schemes and agricultural applications for buildings, tracks, farmhouses and Permitted Development right applications like Class Q. Our team provides advice on the best way of achieving planning permission. Whether this is through a Pre-Application Enquiry, an Outline application, a Full application or using your Permitted Development rights.”

New planning laws for 2024

It is important to also be aware that the government have recently announced a new planning class for short term lets, which will come in to force only in certain areas. Properties will be able to move between being a main home and being a short term let freely, unless its local authority introduces what’s called an Article 4 direction. This may happen if Councils are concerned that in a particular area there are too many short term lets and there is evidence that it’s having an impact on housing supply. In these areas, all new short term lets would require planning permission. Why not consult with Luscombe Maye or another rural professional for information on the planning situation in your specific area?

If you would like help and support at this stage of your journey, our team at Coast & Country Cottages can meet you and visit your land to understand your business requirements. From there, we can make suggestions or offer advice, so you can make informed decisions, enabling you to build the best self-catering accommodation possible, that meets both your needs and budget. For instance, we can offer tips on the optimum number of bedrooms and bathrooms, and even suggest the best layout for your chosen holiday accommodation, to get the most out of the space.

Holiday let taxes, insurance and legalities

A person doing their taxes with a laptop, calculator and documents

Like with any business, there are some legal considerations involved in running a holiday let. You’ll need to consider how your income will be taxed, choose the correct type of insurance, and ensure that your property meets all the necessary legal requirements.

Below is a brief outline of things to consider prior to opening your property for guests, but for more detailed information on getting your property ready for letting, why not read our guide, ‘How to start a holiday let business’.

Holiday let taxes

Of course, it is important to understand exactly what sort of income you can expect from your investment, and what tax implications may come from that. For a complete overview of council tax options for your business, why not read our comprehensive guide.

If you are at all unsure, with each farm diversification project being so unique, we would suggest consulting with your own accountant for personalised advice on how the holiday accommodation will work best alongside your farming business.

Holiday let insurance

Similarly, understanding the insurance requirements for your holiday let is essential.

You will require public liability insurance, with a policy that is suitable for holiday letting and includes cover of £2 million claim per event. This may sound intimidating, but it doesn’t need to be – it’s fairly straight forward to get a range of quotes on all of the usual insurance comparison websites. For a more detailed look into holiday let insurance, read our full guide.

Health and safety regulations for holiday lets

There are a number of health and safety checks that you are legally required to do, to protect both yourself and your guests. We have a full ‘Property Safety Guidance’ document that we can share with owners that need advice on the health and safety aspects of setting up a holiday let – and for owners that join our portfolio, we can support with organising these legislative documents on your behalf.

However, with this sort of diversification project, there is the added consideration of the farm; if it remains a working farming enterprise, there are added risks and dangers – a full assessment of which needs to take place. Enlisting experts in this area, such as Cornish Mutual, who have a dedicated team of Health and Safety advisors, would be prudent, particularly when you begin letting for the first time.

Another useful resource to help you with creating a full risk assessment and plan of action for your property is the Health and Safety Executive (HSE) website.

How to price your holiday let

We believe a huge part of achieving the best return on investment, lies in having realistic and viable pricing. We use our data to set our prices, based on comparable properties in the area, and similar types / standard of accommodation.

Many owners like to set their own pricing and stick to rigid structures. However, in today’s world, this is not always conducive to maximising booking and income potential.

In addition to excellent marketing exposure, we offer dynamic pricing tools, giving owners the ability to maximise their income as well as booking numbers. We can automatically adjust prices in line with demand by analysing searches, booking trends and individual property performance.

Owners who are happy for their pricing to be driven by this software can earn up to 40% more revenue than owners on a fixed pricing matrix. Similarly, owners that take our advice on where their base price should sit, earn on average 16% more revenue than owners who set their own pricing.

Standing out from the competition

In order to optimise the booking and income potential of your farm diversification project, it is important your accommodation ‘stands out from the crowd’ in this competitive market. Ensuring you consider your customers’ needs and cater for them is an important part of this. These are just some of the considerations you can make:

Accept pets

A small dog sat on a dog bed

We’ve seen a 60% increase in searches for pet friendly holidays since 2019. Properties accepting pets earn on average 4 extra bookings and 18% more revenue per year, meaning making your property dog-friendly will pay dividends!

Ideally, this would mean ensuring there is an enclosed outside garden, as well as providing a few doggy extras like dog bowls and towels. A composting ‘dog loo’ also works well!

Value adding features

Properties with a hot tub can earn an average of 37% more per year! Wood fired hot tubs are a very popular addition to glamping properties, and can add to the ‘off grid’ type experience. Similarly, properties with an outside space, ideally with seating or patio furniture, are increasingly popular and can be priced accordingly.

Properties with wi-fi also earn 26% more. Other features glamping properties often have include fire pits or pizza ovens, saunas and even outdoor showers!

Adding some of these features to your glamping property where possible, will enhance your customer’s experience and be beneficial in the long run.

Be flexible with short breaks

21% of our bookings in 2023 have been for short breaks. Particularly for accommodation like huts and yurts, consider that they may be more suited to 3 or 4 night breaks rather than whole weeks.

And whilst short breaks may mean more changeovers, it can also mean increased revenue. Two short breaks in place of one week long booking returns on average 160% of the weekly rental.

Accept last minute bookings

Last minute bookings have been key this year – 25% of our bookings taken so far for 2023 have been made within 4 weeks of the holiday start date. Be open minded and consider accepting booking right up to the arrival date!

Farming is a USP

Chickens eating corn on a farm

Being on the farm also offers you a unique selling point. The popularity of TV programmes like ‘Clarkson’s Farm’ on Amazon, Channel 5’s Our Yorkshire Farm and BBC’s Countryfile show the genuine interest the general public have in day-to-day farming life.

Activities farmers take for granted like feeding chickens, collecting eggs and tending to sheep will be loved by all generations of holiday makers, and will help secure repeat bookings.

Making your holiday let sustainable

Many people are choosing glamping breaks over other holiday options for environmental reasons. This is something to be mindful of if you are looking to optimise your booking potential. 22% of our owners have made sustainable changes to their property.

For instance, you might consider installing a wood burner as the heating source, and providing a stash of logs for customers to use. Or you could fit an electric charging point at the property, or somewhere onsite, for electric car users.

Holiday let interior design

Once you have decided on your type of accommodation, it is worth considering how your property will be styled. In terms of fixtures and fittings, for those buying a prefabricated pod or shepherd’s hut, much of the work will be done, whilst for those decorating and furnishing a new barn conversion, there is much more to consider.

More often than not, those choosing to stay in a converted barn or shepherd’s hut are looking for an authentic farm stay. Whilst there is always a space for ultra modern fixtures and furnishings, think about whether that is right for your property, or whether something traditional might be more in keeping.

A lovely way to allude to the property’s heritage and surroundings, is to incorporate aspects of your farm into the styling. For example, consider framing prints of the barn conversion or land in its previous state and mount on the walls, to give guests some context and history. Or why not introduce sheep skin rugs from the farm’s flock of sheep… there are many great options to retain the building or space’s identity, whilst still allowing it to have a new lease of life.

As well as styling tips, we can also provide you with an inventory of what to include in your holiday cottage, and help you decide on furnishings that will stand the test of time. From knowing the best materials for easily cleaning off mucky paw marks, to understanding which fabrics won’t show quick signs of wear and tear, we’re on-hand to help!

Shepherd’s hut interior design

Depending on the type of shepherd’s hut you buy, you may find that all the interior design work has been done for you. However, if you’re planning on styling the shepherd’s hut yourself, there are a few things to consider.

Guests staying in a shepherd’s hut are likely to expect a rustic, countryside feel throughout their stay, so it makes sense to include this in your property’s design. Consider understated pastel greens and natural tones to give your hut a peaceful, country ambiance. It’s also a good idea to keep furnishings minimal to make the most of your shepherd’s hut’s floor space – it’s no use having a beautiful interior if the space can’t be used practically. View Sykes Holiday Cottages’ collection of shepherd’s huts for some design inspiration.

Running a holiday let business

Here are just some of the key aspects involved in the day-to-day running of your holiday home:

  • Changeover cleans between bookings
  • Linen and laundry
  • Guest liaison before, during and after their stay, including travel directions and key collection communications
  • Any maintenance or emergency issues

Self-catering holiday accommodation can provide an excellent income and can be very rewarding if you are a people-person, but consider the demands on labour. When planning your accommodation and how you will service it, think carefully about logistics and make decisions accordingly. For instance, consider whether you need to add a new laundry room into your plans, where you can handle the linen. This is particularly important if you are taking back-to-back short breaks, which can increase profits but adds washing!

With the year-round demands of the farm, be sure to factor in who will do the changeovers when you are stretched with your other commitments. Peak holiday seasons very often coincide with busy times on the farm i.e. Easter and lambing, May Half Term and silage time, Summer holidays with combining and Autumn Half Term with maize harvest! Consider whether you need to employ a cleaner or caretaker to help some or all the time. Of course, a good agent like Coast & Country Cottages can take care of this every day running of your holiday let if you prefer.

An example of farm diversification: Butterwell Barn

A superb example of successful farm diversification, Butterwell Barn is an award-winning barn conversion, loving renovated by the Bond family on the outskirts of historic Dartmouth. Run alongside their sheep farm, this property achieved 23 bookings in 2023, and is an inspiring case study for anyone looking to do a similar project on their own farmstead. Read our case study blog to find out more.

Choosing a holiday letting agent

Finally, picking the right letting agent is very important to your property’s long term success. We suggest choosing an agent that doesn’t race to the bottom with lower commissions, but instead focusses on the service they deliver guests and owners, and on the number of year-round bookings they can realistically achieve.

As part of the Sykes Holiday Cottages family, we offer national, industry-leading marketing exposure, combined with hands-on support from our local offices in Salcombe and Dartmouth. Here are some of our latest marketing insights, and ways we have secured bookings for our owners:

● We have a £35m annual marketing budget

● We dominate in Google search results, with a 43.7% market share amongst the four largest competitors in the industry.

● We’ve run several successful booking initiatives this year, such as our low deposit payment and flexible cancellation schemes.

● We’re always expanding our wide network of partner sites, like Airbnb and, giving owners the very best opportunity to be seen across multiple websites and platforms.

So, what now?

Setting up a holiday letting business may seem like a daunting venture, but with specialist help and guidance, you can rest-assured you’re in safe hands.

At Coast & Country Cottages, our team of local holiday letting experts works alongside trusted businesses across South Devon, such as Luscombe Maye, to make sure you receive the best possible experience throughout your holiday letting journey.

We are delighted to have helped a number of owners diversify, or supported them with their projects. Ranging from safari tents, unique pods and shepherd’s huts, to luxury barn conversions, we have experience in all property types.

Our New Property Consultants would be pleased to offer advice or an income and booking projection, whatever stage you are at! This can be particularly useful, both so you know what to expect from a holiday letting business, and to provide to your money lender, if you are looking to loan money to start your venture.

Contact our New Property team today

Looking for more information to help with your farm diversification project? Here we’ve answered some of your top queries in our holiday home owner blogs:

Are holiday lets a good investment?

What is the cost of running a holiday let?

What happens once I decide to let my holiday home?