Key Updates Impacting Lagos Holiday Lettings Market 2025

The past few months have brought some big updates for the holiday lettings market in Lagos and the wider Algarve. For property owners, landlords and real estate professionals, these changes could offer better returns and improved legal clarity. Here's what you need to know.

In a major win for the region’s tourism and rental markets, the Algarve has been ranked the best-value holiday destination for British tourists for the first time in nine years. This is based on the 2025 Post Office Travel Money Holiday Costs Barometer, which compares prices across 47 global destinations.

Exchange Rates Give Tourists More Spending Power

Another contributing factor to the Algarve’s popularity this spring is the recent strength of the British pound and the Euro against the US dollar. At the end of April 2025, both currencies reached their highest levels since the 2024 US election. Market reactions to changes in US trade policy have played a part in this surge, creating better exchange rates for travellers heading to the Eurozone.

For holidaymakers, this means more value for their money, especially when booking accommodation, meals and activities in Portugal. It’s a positive trend that supports the local holiday rental market in places like Lagos, where affordability and sunshine are a winning combination.

AL Licence Reform Brings Big Shifts

As of November 2024, Portugal introduced new rules through Decree-Law No. 76/2024, which are now having a noticeable impact this summer. These updates apply to Alojamento Local (AL) licences – the registration required for short-term holiday rentals.

Key changes include:

Transferable Licences
Previously, AL licences were cancelled when a property changed hands. Now, they can be transferred to the new owner. This is a major benefit for investors and sellers, making holiday rental properties far more attractive to buyers.

No More Five-Year Renewals
AL licences are now permanent. The five-year renewal rule has been scrapped, giving property owners more security and reducing long-term admin.

Local Authority Control
Municipalities like Lagos can now introduce their own rules for AL registrations. This allows for localised decision-making to address housing supply, noise concerns or tourist volume, though no major changes specific to Lagos have been announced (yet).

Condominium Permissions Eased
Starting a holiday rental in a residential building no longer requires unanimous consent from other apartment owners. Condos can still object on specific grounds, like proven disturbances, but the overall process is simpler.

What This Means for Property Owners in Lagos

If you already own a short-term rental, these changes make your business model more secure. If you’re considering entering the market, the new rules reduce red tape and improve long-term flexibility. And if you're thinking of selling, the ability to transfer AL licences could raise your property’s value.

To Finish…

Lagos remains one of the Algarve’s most popular holiday destinations, and these changes strengthen its position as a prime spot for holiday rentals. Staying up to date with licensing rules and local trends is key to making the most of your investment.