Short-term lets: Will it be a case of Air today, gone tomorrow? - David Alexander

When the City of Edinburgh Council announced a crackdown on residential properties being used for unlicensed short-stay lettings, I admit to having been sceptical about the authority’s ability to deliver.

But credit where it’s due, the council appears to have been true to its word and, what’s more, is being backed by the Scottish Government when landlords appeal – the most recent example being just last week in a case involving two flats in the highly-popular Marchmont area of the capital.

This is part of what seems to be a backlash against letting flats for short-term leisure or business stays (though principally the former) in residential blocks or neighbourhoods. No doubt it was what prompted Airbnb to announce recently that it would no longer let listed properties to single- and/or mixed-sex groups, which cause so much misery to neighbours, especially at weekends.

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But banning “party flats” – as these properties have become known – do not resolve the questionable principle of permitting the expansion of “letting for leisure” in buildings which were constructed primarily as long-term owner-occupied or rented residences.

Airbnb locks at an Edinburgh tenementAirbnb locks at an Edinburgh tenement
Airbnb locks at an Edinburgh tenement

Take the “ideal” holiday tenant (at least for the property owner) – a quiet, middle-aged, non-smoking couple employed in academia in some North American university backwater. Hardly the type of people likely to cause anyone any bother are they?

Well, up to a point, no. Still, most tourists are likely to want to venture out each evening (and being on holiday, why shouldn’t they?) which means additional coming and going in the common areas, perhaps late at night. If visitors are catching an early flight home this can mean being woken by the sound of luggage bumping on stone stairs at 4am plus there is the inevitable taxi engine labouring outside the common entry for dear knows how long. Meanwhile “changeover days” (frequent, of course, for holiday lets) produce more noise – this time from cleaners, professional or otherwise, making the accommodation ready for the next arrivals.

So, not so peaceful after all for permanent residents, especially during the week when they have to get up for work.

Until relatively recently, Edinburgh’s holiday letting sector was the preserve of a few reputable agencies and was sufficiently low-key so as not to present a social problem. However the practice has become so unregulated – and widespread – that not only should it not be allowed to continue at its present level but actually put into reverse.

David Alexander is the chief executive officer of DJ Alexander ScotlandDavid Alexander is the chief executive officer of DJ Alexander Scotland
David Alexander is the chief executive officer of DJ Alexander Scotland

I hope, therefore, that the city council will not settle for some sort of compromise whereby short-stay lettings are deemed permissible as long as they have planning consent. An abundance of properties used in this way reduces the stock of permanent residences and when demand exceeds supply – which is the current situation and one likely to last for the foreseeable future – the inevitable result is higher prices for owner-occupiers and more expensive rentals for long-term tenants.

Given this problem is by no means confined to Edinburgh, either in the UK or on the Continent, I’m surprised that the Leeds Building Society has not included holiday lets as part of a tightening up of mortgage lending which has seen it introduce a ban on loans for second homes.

Such purchases are popular in tourist hot-spots and other scenic locations within an easy drive of major centres of population. However the level of demand is such that locals are often “priced out” (often by professional types from the cities), especially first-time buyers in what are generally low-income areas.

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Having said that it seems worth pointing out that, in addition to the relevant rate of LBTT, each second home sale in Scotland attracts an additional tax of four per cent of the purchase price, money which (one hopes) contributes to funding public services. Also, there are some second homes which, because of their condition or location, would not work as main homes so it is surely better that these are used as a weekend retreat rather than fall into ruin.

David Alexander is chief executive officer of DJ Alexander



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