Edinburgh’s Airbnb lettings growth set to spike with new licence

Many long-stay landlords have had their fingers burnt on the other side, says Alexander. Picture: Laurence Winram
Many long-stay landlords have had their fingers burnt on the other side, says Alexander. Picture: Laurence Winram
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Just over two weeks ago Edinburgh welcomed the new year in the company of thousands of visitors from around 90 different countries.

Many of them would have stayed not in hotels or guest houses but in former residences turned over to short-stay accommodation, particularly those booked through the website, Airbnb.

However I wonder if Edinburgh’s Hogmanay of 2020 will mark the high-level mark in the capital’s rush to short-stay lettings.

Just a week after, Housing Minister Kevin Stewart told the Scottish Parliament that his government would provide local authorities with the ability to implement a licensing scheme for short-term lets from spring 2021. Consequently planning permission will be required for the change of use of whole properties for short-term lets, complemented by a tougher regime to ensure that those benefitting make an appropriate contribution to the local tax base.

The tax regime currently gives an unfair advantage to short-stay landlords over permanent providers but I also suspect many of the former operate under the radar, do not pay tax, and hope an under-resourced council will not find out.

Early in December Airbnb, stung by growing complaints from permanent residents living cheek by jowl with short-stay accommodation, announced it would trial a detector scheme to expose nuisance issues. Apparently it involves an app that warns landlords of excessive noise from their properties. The landlord (or agent of the app provider) will then call on his clients to quieten down and they – including stag and hen groups – will, of course, immediately accede. Aye, right.

'The extra money wasn't worth the hassle'

However the problem is not just one of “party flats”, with many residents claiming they are becoming strangers in their own city. With no like-minded neighbours, permanent residents have no-one from whom to borrow a jug of milk, or take in a parcel purchased online, or simply to stop and have a stairhead chat with. True, some people do not wish neighbourly interaction and are happy to keep themselves to themselves – but should they at least not have a choice?

Even when leisure tenants are of the “quiet” variety, constant changes of occupation mean extra noise and disturbance, such as luggage being frequently bumped up and down common stairs, taxis coming and going, late night opening and shutting of doors (tourists, understandably, like to venture out on “school nights”).

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Whatever the Government comes up with is unlikely to be implemented until next spring but the experience of some short-stay landlords suggests the growth in this type of accommodation is about to spike.

Over the past couple of years my firm has lost landlord-clients to the leisure market (we do not deal in short-stay lettings). However, a number have now returned to the long-stay fold, having had their fingers burnt on the “other side”. They did boost their incomes, substantially in some cases, but daily/weekly changes of residents led to extra cleaning, frequent laundering of bed sheets and added wear and tear on carpets, furniture and fittings. Some were also on the receiving end of complaints from neighbours. In a nutshell, the extra money just wasn’t worth the hassle.

Edinburgh has always had a thriving short-stay rental market, much of it managed by reputable specialist agencies. But the number of properties to cater for visitor demand used to be appropriate and did not adversely affect the level of permanent rental stock which, more recently, has led to problems for those working in the city and seeking a place to live. Reduced stock inevitably leads to an increase in rental charges, especially in a city with a healthy jobs market and a growing economy.

Given Edinburgh is now a year-round tourist destination there is clearly a place for Airbnb and similar-type accommodation. However, the balance that worked so well in the past is out of kilter so let us hope what the government comes up with restores an even keel.

- David Alexander is MD of DJ Alexander