Exploring Farm Diversification for holiday letting

If you own farm land in the Cotswolds, you may want to look at exploring farm diversification to earn additional income.

Farming as a landscape and career has changed immensely over the last 10 years alone. Therefore, many of our owners have diversified outbuildings to holiday let.

Read on for our guide to farm diversification with Manor Cottages.

What is farm diversification?

In its simplest form, it is where existing farming businesses can explore generating further revenue through a new avenue, such as holiday letting.

According to Farmers Weekly, “Higher demand, coupled with concerns about post-Brexit support for agriculture, has made farm diversification into letting cottages, barns, annexes and apartments more attractive”.

Come 2025 many subsidies change or disappear, leaving farmers and landowners with a gap in their income.

Demand for staycations are at an all-time high, meaning now is a great time to start planning for your future. One way to do this is by investing in the holiday let industry.

Therefore generating more income as well as add value to your land.

Considerations

One of the biggest considerations before holiday letting existing outbuildings or barns is commitment.

Do you have the capacity to be able to manage a, or a handful of holiday lets alongside of your agricultural commitments?

This is where using a holiday letting agency can help. At Manor Cottages, we support our owners in managing their bookings, providing managed service options for cleaning and maintenance plus, exceptional national marketing.

Another consideration is applying for the relevant planning permission for the chosen outbuildings or barns.

You will need to take into account access to the property for guest and ensure this doesn’t interrupt you if you have a working farm.

Safety is key for yourself and guests, so you’ll need to make sure that gardens, courtyards and driveways are secure. If you choose to make your holiday property pet friendly and livestock are present, security is key.

Types of outbuildings suitable for farm diversification

At Manor Cottages, we have several different types of outbuildings within the portfolio. These range from shepherd’s huts, barns and stables.

Other options could be:

• Cowsheds
• Lodges
• Cabins

Glamping is becoming a huge trend for farm diversification with more and more farm land opening up offering yurts or pods to book. You’ll need to look into water supply and provide showers and toilet facilities if you’re looking to offer this.

Tax Benefits

If you’re looking to holiday let in England for more than 140 days of the year, you can register for business rates. Therefore, you will not need to pay council tax on the property. Instead, you will pay business rates.

However, if the rateable value of your property is less than £12,000 per annum, you can claim small business rates relief. This can mean you pay no business rates or council tax.

To do this, you’ll need to provide a holiday letting pricing appraisal to make a business case for banks. At Manor Cottages, we can visit your property or farm, and provide this for free.

Please Note: The information contained in this article was accurate at the time of writing, based on our research. Rules, criteria and regulations change all the time, so please contact our prospective new owner team if you’d like to hear how. Nothing in this article constitutes the giving of financial, tax or legal advice to you; please consult your own professional advisor (accountant, lawyer etc). in this regard. If we have referred within the article to a third-party provider of unregulated holiday let mortgages, this is due to the fact that such mortgages aren’t currently regulated by the FCA. 

As a helpful reminder, your home may be repossessed if you do not keep up repayments on a mortgage, so again anything you decide to do in this particular area this is one on which you should take your own professional advice on too, as we aren’t providing and can’t provide you with this.