Edinburgh landlords turning their backs on Airbnb after short term lets clampdown

LANDLORDS in Edinburgh are already turning their back on services such as Airbnb as the city clamps down on short-term lets, a city property expert has revealed.

It came after Edinburgh City Council’s planning committee on Wednesday unanimously voted to bring in new measures to designate the entire city a Short Term Let (STL) control zone.

Malcolm Pickard, of property management firm Tay Letting, says the new rules, if approved, mark a ‘tipping point’ for STL landlords, many of whom have already struggled through the Covid-19 pandemic, with tighter control of the loosely regulated sector meaning running costs are almost certain to rise to impractical levels.

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Mr Pickard said Tay Letting has seen a sharp rise in enquiries from STL landlords since the start of the year, with many concerned about the impact of the proposed regulations voted through on Wednesday.

The proposals, which are still to be approved by the Scottish Government, mean landlords wishing to list properties that are not their usual home would need to apply for a ‘change of use’ through the city council’s planning department.

HeraldScotland: Edinburgh City Council’s planning committee on Wednesday unanimously voted to bring in new measures to designate the entire city a Short Term LetEdinburgh City Council’s planning committee on Wednesday unanimously voted to bring in new measures to designate the entire city a Short Term Let

Although it is yet to be confirmed how this will be implemented, Mr Pickard believes it is likely to mean property owners will have to adhere to much tighter rules in order for properties to be let out legally.

Mr Pickard, Director at Tay Letting, which manages more than 1,800 properties in the Private Rental Sector (PRS) across Edinburgh, Dundee and Glasgow, said: “We have already seen an exodus from the short term let market into the private rental sector since the Covid-19 pandemic began when the market was virtually wiped out. Those who have toughed it out or returned to the STL market were probably hopeful of recovery, but if approved by the Scottish Government, this move from the city council will prove the tipping point for most.

“Since the start of the year we’ve seen dozens of landlords come to us to inquire about switching from short term lets to private rentals. One property owner, who lets out two of their three city centre properties on Airbnb, plans to move them all to private rental as it’s no longer worth it. Others have seen this move coming and decided STL is no longer for them.

“The gross income from short term lets is the big attraction for owners, but these new regulations are likely to mean tighter control around things such as gas and electrical safety certificates; short-term rental registration; water safety certificates; furniture and appliance checks; and more, and that all brings with it additional costs many will not be prepared to swallow.

“Short term lets were once something that could be run personally, but in recent years we’ve seen more people using agencies to manage properties. With added regulation, those fees plus the cost of compliance with what could be very tight regulation will likely prove too costly. Landlords can already get this in the PRS with far less risk, hassle and time commitment, not to mention the added wear and tear on property associated with short term lets.”

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He said they had heard horror stories of buildings containing seven short term lets, and it can be a nightmare for longer-term residents. Mr Pickard added there was heightened concern too around vulnerable residents when there is a high level of transient footfall.

“There will be a few winners from the change – most notably landlords with front-door entry properties that meet the likely requirements for short-term let licences, but those with properties in shared closes etc will be very likely to look for alternative means of making money from their property,” he added.

HeraldScotland: A ‘short term let control zone’ could be created across the capital A ‘short term let control zone’ could be created across the capital

“There’s no doubt action was needed, and it will be interesting to see how things play out – particularly around what is required to obtain a short term let licence.”

He added: “A continuation in the flow of traffic from short term lets to the private rental sector – which of course increases the supply of properties – is likely to have a plateauing effect on rents, which will be good for renters in the short term. We did, however, see this during and after the pandemic, but rental prices began to rise again as demand inevitably increased and I’d expect to see the same happen again.

“Ultimately it’s too early to call what the long-term impact of this will be, but Edinburgh is not the only city in Scotland with a shortage of property for rent, and I fully expect other councils to be watching the progress of the short term let control zone closely.”

HeraldScotland: Malcolm Pickard of Tay LettingMalcolm Pickard of Tay Letting

A consultation on the plans found 85% of respondents are in favour of the control zone covering the whole Edinburgh City Council area.

The City of Edinburgh Council’s planning committee unanimously backed the plans to require a change of use application on Wednesday, an outcome convener Neil Gardiner hailed as “great news for people across the city”.

The Scottish Government will now need to agree with the city council, which said the new rules would not block people from renting out rooms or their whole house while on holiday.

Mr Gardiner said: “If approved by Government, these new powers for Edinburgh will provide the clarity we need where planning permission is required for a change of use.

“Just now, if it’s reported to us that a property has changed its use without planning permission, our enforcement team has to look at each case individually.

“This is a very lengthy and time-consuming process.”

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