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A hiker and their dog hiking in the mountains of the Lake District

Are you a farmer or landowner looking to generate some extra income? One way to do that would be to go down the route of farm diversification into holiday letting.

Read on to find out what the benefits would be and see if holiday letting is right for you.

What does farm diversification involve?

Farm diversification means developing your existing farming business to bring in extra money through a new avenue, such as holiday letting. This could involve transforming unused barns into cottages, or building new properties on your land.

A large number of farms have unused outbuildings that have been redundant for quite some time. Rather than let them fall into ruin, or knocking them down altogether, optimising them into usable spaces would be much more beneficial and can help to bring in some extra income. Likewise, some farms have additional land that they no longer require for farming purposes so it would be an ideal opportunity to open this space up to extra business.

A group of traditional whitwashed cottages in the English Lake District, with Bowfell in the distance.

What are the benefits of holiday letting?

The main benefit to holiday letting is the extra income it would generate. On average, properties let with Lakelovers can earn around £25,000 a year dependent on the size of the property. We can arrange a no-obligation visit with one of our Property Consultants who can discuss with you the potential of your holiday lets, and give a more accurate income projection – we can even arrange a visit before your properties have been converted (or even built!) to discuss the best options for you going forwards.

If your holiday properties qualify as a Furnished Holiday Let (FHL) there are certain tax relief schemes that work in your favour, such as small business rate relief. This can save you money by reducing the amount of council tax you have to pay. You can read more about running a Furnished Holiday Let on our blog here.

Which kind of holiday let is right for me?

There are many different types of holiday lets that would be suitable to develop on farmland:

Converted Buildings

Outbuildings such as old barns that are no longer in use offer a great opportunity to develop a holiday let. Barn conversions are always popular with holidaymakers who enjoy a traditional, cosy cottage with original features such as exposed beams. Meanwhile, old stables and cowsheds can offer guests a more unique & interesting place to stay. Making use of existing buildings also requires less work than building from scratch as the foundations & general structures are already built.

Shepherds Huts

These are massively growing in popularity due to the unique self catering experience they offer. Shepherd’s huts can be built in a range of styles. From simple & traditional to more extravagant colours & designs, these properties are ideal for couples looking for a romantic getaway somewhere a little different. Plus, they would fit right in with farmland as a backdrop!


Oak Ref. 1137734

Glamping Pods & Yurts

Similar to shepherds huts, glamping pods offer a taste of the simple life but with a luxurious edge. Quaint & cosy from the outside, but with top quality furnishings & amenities inside, this kind of property helps people escape to the countryside without sacrificing any home comforts.

Cabins & Lodges

Relatively cheap & easy to build, wooden lodges would be a great option to start off your holiday letting journey. Always popular with guests, wooden lodges often appeal most to families searching for an outdoors-based holiday. Log cabins would look great dotted amongst the trees if you have an area of woodland on your farm.

Dunfell Shepherd’s Hut Ref. 1143291

Get advice from NFU Mutual who provide rural business support via project planning and management, advising on RDPE and other grants, feasibility studies, business plans and planning advice.  With experience in renewable energy, local food production, farm and rural business diversification, and community resource and social enterprise projects, the team combines years of practical hands on experience, supported by a breadth of knowledge across key rural areas of policy, assessing need, managing change and delivery.

How would I manage my holiday let?

If the thought of running a holiday let is feeling a bit daunting, don’t worry! Here at Lakelovers we can offer a managed service to suit you. From organising cleaners and handling bookings, to keeping on top of maintenance and repairs, we can do it all! If you’ve got your hands full on the farm, we’re here to help & make things as hassle-free as possible.

Check out our guide on choosing our fully managed services and see what support we can offer.

With over 40 years of letting experience, we have the experience and knowledge to help you start your farm diversification journey. Phone the local team on 015394 88855 or click here for more info.