Holiday Let or Buy-to-Let in Croydon: What the Numbers Show
Verdict: Buy-to-let wins decisively. London's 90-night cap makes it mathematically impossible for holiday letting to match buy-to-let income in Croydon.
Best For: Buy-to-let investors seeking above-average yields in a well-connected London borough with strong tenant demand.
Scores out of 10 across yield, regulations, tax, risk, and market fundamentals. How we score
Underlying Assumptions (data as of April 2026):
- Property Price: 3-bedroom houses estimated at around £492,204
- Monthly Long-Term Rent: Approximately £2,163
- Holiday Let Nightly Rate: Around £193 per night (varies seasonally)
- Assumed Holiday Let Occupancy: 60% average across the borough (varies significantly between specific locations)
- Available Holiday Let Nights: 90 per year (London 90-day rule)
- Regulations: Restricted. Limited to 90 nights per year under London's Deregulation Act 2015. Exceeding 90 nights requires planning permission from Croydon Council. Airbnb automatically blocks bookings beyond 90 days for London addresses.
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Estimates for a typical 3-bedroom house. Figures are modelled from market data; not guaranteed outcomes.
Croydon offers a compelling proposition within London. Property prices sit well below the London average of £631,954, while rents remain relatively close to the London median. The result is a gross yield of 5.3%, notably higher than the 4.6% London average. Compared to the broader UK median yield of 5.7%, Croydon's returns are competitive, particularly given the capital growth potential that comes with a London postcode.
The entry price matters too. At around £492,204 for a 3-bedroom house, Croydon sits at a significant discount to the London-wide median of £631,954. That lower entry point reduces the deposit required and improves leverage metrics, making it one of the more accessible London boroughs for buy-to-let investors. Data sources include Land Registry transactions and rental listings across the borough.
Investment Bottom Line: Buy-to-Let Is the Only Viable Strategy in Croydon
Croydon's combination of below-average London prices, above-average London yields, and strong transport links (East Croydon is one of the UK's busiest stations) makes it a solid buy-to-let market. Holiday letting is mathematically unviable under the 90-night cap: it produces negative net income, offers no tax advantage since the Furnished Holiday Lettings (FHL) abolition, and requires significant upfront furnishing investment for a loss-making outcome.
The right question for Croydon investors is not "holiday let or buy-to-let?" but rather "which postcode area within Croydon offers the best buy-to-let return for my budget?" Yields range meaningfully across the borough, from the strongest areas like Thornton Heath (CR7) down to more expensive pockets where the gross return thins considerably.
| Investor Type | Fit |
|---|---|
| Cash Flow Focused | Good |
| Appreciation Focused | Good |
| Holiday Let Operator | Poor (90-night cap) |
| High Leverage (80%+ LTV) | Fair |
Data reflects market conditions as of April 2026. For a detailed, suburb-level breakdown using your specific property type and bedroom count, explore Croydon in the dashboard.
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This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.