For coastal and second-home owners across Torbay and Teignbridge, 2026 is becoming a year for careful decisions rather than quick property moves.
The sales market has softened, buyers are more cautious, and achieving a preferred asking price may take longer than it did previously. At the same time, the long-term rental market remains comparatively stable, supported by a shortage of good-quality homes and continued demand from local households, relocators and working tenants.
This has led some holiday-let and second-home owners to reconsider how their properties are used. For some, moving from short-term accommodation to a long-term tenancy offers a steadier income, fewer seasonal fluctuations and a more straightforward day-to-day arrangement.
Here is what landlords in Torbay and Teignbridge need to watch in 2026.
The holiday-let tax reform is already in effect
The main holiday-let reform affecting landlords in 2026 is the abolition of the Furnished Holiday Lettings tax regime.
Although often described as a “2026 reform”, the change took effect from:
- 6 April 2025 for Income Tax and Capital Gains Tax
- 1 April 2025 for Corporation Tax and corporation tax on chargeable gains
This means that, when owners complete their 2025/26 tax returns in 2026, former furnished holiday lets are generally treated in line with other residential property businesses.
According to the HM Revenue & Customs policy paper, the previous regime’s advantages have been removed in several key areas. These include:
- The application of finance cost restriction rules to loan interest
- The removal of the more favourable capital allowances treatment for new expenditure
- The loss of certain Capital Gains Tax reliefs previously available to qualifying holiday lets
- Former holiday-let income no longer counting as relevant UK earnings for pension relief purposes
- The removal of separate furnished holiday-let reporting arrangements
The practical impact will vary depending on ownership structure, borrowing, use of the property and individual tax circumstances. Landlords should speak to a qualified accountant or tax adviser before making a decision based on tax alone.
However, the reform is undoubtedly prompting more owners to review whether short-term letting still provides the right balance of income, work and risk.
Why some owners are moving towards long-term renting
Holiday lets can perform strongly during peak periods, especially in attractive coastal locations such as Torquay, Paignton, Brixham and Teignmouth. But they can also involve a more intensive operating model.
Owners may need to manage:
- Seasonal occupancy and quieter winter periods
- Cleaning, changeovers and linen
- Utility bills and ongoing furnishing costs
- Guest communication and booking administration
- Advertising and platform fees
- Repairs between stays
- Council tax and business-rate considerations
- Additional safety, planning or registration requirements
For some owners, the income may still justify the extra work. For others, particularly those living away from the property, the attraction of a long-term tenancy is predictability.
A long-term let can provide:
- Regular monthly rental income
- Fewer changeovers and less furnishing wear
- Reduced exposure to seasonal fluctuations
- A longer period of occupancy
- Greater day-to-day certainty
- A clearer management routine
It is not automatically the right choice for every property. A successful holiday let may produce higher gross income during the busiest months, while a long-term tenancy may offer greater stability and less operational involvement. The right answer depends on the property, financing, personal objectives and local rental value.
The important point is that owners now have a stronger reason to review the whole picture rather than relying on historic holiday-let tax advantages.
The rental market is proving the more stable alternative
Across Torbay and Teignbridge, the rental market is showing more stability than the sales market.
This does not mean landlords can name any rent they wish or expect endless increases. Tenants remain price-sensitive, and affordability continues to matter. But demand for well-presented homes remains solid, while the availability of suitable rental properties is still restricted.
The latest Office for National Statistics data for Teignbridge illustrates the contrast. In May 2026, the provisional average house price in Teignbridge was £302,000, down slightly from the previous year. Meanwhile, the average private rent reached £954 per month in June 2026, an annual increase of 3.5%.
That is not a prediction that prices will rise, nor does it remove the need for realistic landlord expectations. It does show why many property owners are looking at rental income as a steadier alternative while the sales market remains more measured.
Our own local market update reflects what we are seeing across the area: properties that are accurately priced, well maintained and professionally presented continue to attract attention from tenants.
Torquay supply remains particularly tight
The Torquay region remains one of the clearest examples of restricted rental supply.
Good-quality long-term homes are not appearing in sufficient numbers to meet demand. This is especially noticeable for properties that offer the features tenants value most, such as:
- Two or three well-proportioned bedrooms
- Parking or easy access to transport
- Outdoor space
- Energy-efficient heating and glazing
- Modern kitchens and bathrooms
- A convenient position for schools, work and local amenities
- A clean, well-maintained presentation
Torquay has a distinctive lifestyle appeal. Tenants may be drawn by the harbour, Wellswood, the seafront, local employment, schools or the wider English Riviera setting. But lifestyle alone is not enough. Tenants are looking for homes that feel comfortable, dependable and ready to live in.
For landlords, tight supply can support reliable occupancy when the property is priced correctly. It can also help reduce unnecessary void periods. However, it does not remove the need for careful tenant selection, proper maintenance and full compliance.
A property that is dated, poorly photographed or priced above its realistic market level can still struggle, even in a supply-constrained area.
What should holiday-let owners consider before switching?
Moving a property into the long-term rental market is more involved than simply replacing a holiday listing with a “to let” advert.
Before making the change, owners should review:
1. The property’s rental suitability
A holiday cottage may be attractive to visitors but need adjustments for a long-term household. Consider storage, white goods, heating, privacy, garden maintenance and whether the furniture is suitable for an extended tenancy.
2. Realistic rental value
The correct rent should reflect current local evidence, condition, location and tenant affordability. In Torbay and Teignbridge, pricing needs to be guided by comparable long-term rental homes rather than peak-season holiday income.
3. Compliance requirements
Long-term landlords have ongoing legal responsibilities, including appropriate safety checks, deposit protection, right-to-rent processes, prescribed information and property condition obligations. The regulatory environment continues to develop, so professional guidance is valuable.
The government also continues to develop wider rules for short-term and holiday accommodation in England. Owners should check the latest information on the GOV.UK guidance for letting out a self-catering holiday home, particularly if they are considering keeping the property as a holiday let.
4. The management workload
A long-term tenancy may reduce the frequency of guest-related tasks, but landlords still need to respond to repairs, monitor property condition, arrange inspections and keep records.
That is where a full management service can make a meaningful difference.
How Butterworth supports landlords through the shift
At Butterworth Sales and Lettings, we support landlords across Torbay and Teignbridge with practical advice based on local conditions.
Our letting services can assist with the transition from holiday use to long-term renting, including:
- Advice on local rental positioning
- Tenant-find and marketing services
- Referencing and tenancy administration
- Compliance support
- Rent collection
- Property inspections
- Maintenance coordination
- Ongoing property management
We also believe that landlords should understand exactly what they are paying for. Our approach includes no hidden costs and no markup on contractor bills. If a repair is required, the contractor’s cost is not inflated by us.
We have also invested in maintenance reporting software to make repair reporting, communication and record-keeping clearer for landlords, tenants and contractors. This helps create a more efficient process, particularly when an owner lives outside the area.
For a landlord deciding whether to retain a holiday let, sell or move to a long-term tenancy, having reliable local management can make the decision much easier.
You can review our approach and pricing through our landlord fees page.
A practical landlord takeaway for 2026
The 2026 decision is not simply “holiday let or long-term let”. It is about comparing the income, costs, workload, tax treatment and risk of each option against your own objectives.
For landlords in Torbay and Teignbridge, a sensible review should include:
- Calculate the true annual income from the holiday let, including quieter periods and operating costs
- Obtain an up-to-date long-term rental appraisal
- Speak to an accountant about the former furnished holiday-let tax advantages
- Check that the property is suitable for a long-term household
- Review compliance requirements before marketing
- Consider whether professional management would improve reliability and reduce workload
- Price according to current local evidence, not previous peak-market expectations
The sales market may remain softer and more cautious through 2026. That does not mean every owner should become a landlord, but it does mean the rental market deserves serious consideration as a stable alternative.
For many coastal and second-home owners, the best next step may be a careful conversation about what the property can realistically achieve, how much involvement it requires and which route provides the most dependable result.