New research has revealed that Dorset is among one of the best locations to invest in a holiday home in the South West, but things could be about to change.

According to Blue Chip Holidays, which has a portfolio of more than 1,000 properties, Weymouth features well in the yield charts for the South West placing first for one-bed apartments.

Wisely-purchased holiday homes are still available from under £100,000, and can have impressive yields of up to 9.66 per cent, returning gross income in excess of £11,000 per year.

While Weymouth’s two-bedroom holiday home properties place just outside the top 10 locations for yields, its three-bedroom properties, available with purchase prices of just over £190,000, have strong yields in excess of eight per cent, with gross incomes of almost £20,000.

Four-bedroom properties can be bought for in excess of £220,000 returning yields of nearly seven per cent. Blue Chip Holidays believes that Weymouth and Portland have huge appeal following the 2012 Olympic and Paralympic Games, making it a good location for holiday homes.

Commenting on the findings Joe Sweeny, above, portfolio develop-ment manager for Dorset said, “Less than two hours from London by car, both Weymouth and Portland offer an attractive long weekend destination. With relatively low prices they remain appealing to investors looking to make their cash stretch as far as possible.

“Currently, property prices in the holiday home market remain relatively static.

“However, if Rightmove’s recent report on property prices in the South West has any truth in it, and prices in the region rise by a third by 2019, now could be a good time to buy before prices ratchet upward.”

Sweeny added: “Undoubtedly, careful buyers can still snap up a good investment property with potential for capital appreciation, good yields, a healthy income and valuable tax benefits. “These benefits, combined with the fact that you can use your holiday home year in and year out, make the case for a holiday home investment increasingly compelling, particularly for individuals looking for an alternative to a traditional pension. “However, the market could be readying itself for a shift, particularly after changes to annuity rules come into full force from April 2015, removing all restrictions on access to pension pots.

“This could lead to a further influx of holiday home investors into the market, and that could mean a hike in prices making now a sensible time to invest before demand rises, and holiday home prices increase.”