Comparison · Property Investment · 2026
Static Caravan vs Holiday Let Investment UK 2026: Which Pays Better?
A static caravan is a low-cost, depreciating leisure asset that can generate rental income through a park sub-let scheme, while a bricks-and-mortar holiday let is a full property investment with appreciation potential, a mortgage option, and full property tax rules. Since the April 2025 abolition of the Furnished Holiday Lettings regime, the tax gap between the two has narrowed, but they remain fundamentally different assets.
TL;DR - 30-Second Summary
- - Static caravan: low upfront cost, depreciates, mandatory site fees, no mortgage, no SDLT, CGT-exempt
- - Holiday let: higher upfront cost, potential appreciation, mortgage available, SDLT + surcharge applies, subject to CGT
- - 2025 change: Furnished Holiday Lettings tax regime abolished — holiday lets now taxed more like standard rentals
Side by Side: Static Caravan vs Holiday Let
| Feature | Static Caravan | Holiday Let |
|---|---|---|
| Value over time | Depreciates | Potential appreciation |
| Mortgage available | No — caravan finance/cash only | Yes — holiday let mortgage |
| Stamp duty | None — classed as a chattel | SDLT + 5% additional-property surcharge |
| Ongoing costs | Annual site/pitch fees, rising yearly | Mortgage, maintenance, insurance |
| Season | Often closed 6–10 weeks/year | Year-round letting possible |
| CGT on sale | Generally exempt (wasting chattel) | 18%/24% CGT applies |
Static Caravans as an Investment
A static caravan sits on a pitch at a licensed holiday park, and most parks offer a sub-let scheme allowing owners to generate rental income when not using it themselves. However, caravans are a depreciating leisure asset, not property — they cannot be mortgaged, generally have no Stamp Duty Land Tax to pay, and are typically exempt from Capital Gains Tax as a "wasting chattel."
Annual site fees are a significant fixed cost that rises yearly and is payable regardless of rental income generated, and most parks impose a maximum "site life" after which the caravan must be replaced — a factor that should be built into any return calculation.
Holiday Lets and the End of the FHL Regime
A bricks-and-mortar holiday let is a full property purchase, financed with a holiday let mortgage, subject to standard SDLT plus the 5% additional-property surcharge, and it carries potential to appreciate in value over time — unlike a caravan.
From April 2025, the Furnished Holiday Lettings tax regime was abolished, removing the ability to deduct full mortgage interest, claim capital allowances on furnishings, and access reliefs like Business Asset Disposal Relief that FHL owners previously enjoyed. Holiday lets are now taxed more like standard residential lets, including the Section 24 mortgage interest restriction (relief given only as a basic-rate tax credit), which has narrowed — but not eliminated — the tax advantage holiday lets once had.
Who Should Choose What?
- - You want a low-cost holiday base primarily for personal use
- - You want simple CGT-free ownership with no mortgage needed
- - You accept depreciation and rising site fees as the cost of leisure use
- - You want a genuine property investment with appreciation potential
- - You want year-round letting flexibility
- - You have the larger deposit and can accept SDLT and mortgage costs
Model site fees, mortgage costs, occupancy assumptions and depreciation carefully before comparing headline rental income figures between the two options.