This September, the Scottish government introduced rules to designate the entire city of Edinburgh as a short-term let control area. This control requires owners of second homes to apply for planning permission in order to continue letting out their property.
But what, if anything, does this mean for England’s short-term rental market? Dale Smith, CEO of holiday home rental company Host & Stay, investigates…
Why the change?
For Edinburgh, this new legislation means that anyone who has a second home will now need to apply for planning permission to change the use from residential to a short-term let. Why? To allow the council to make decisions based on its local development plan and other material considerations.
It’s worth noting that Edinburgh is an extreme example. Around a third of all Scottish shortterm holiday lets can be found in the capital – a very high concentration for what is a relatively small city. So, the reason for introducing the controls is a simple one: there are simply too many holiday homes.
This impacts the local housing market in a number of ways: houses become unaffordable, there are too few of them for local people to buy, areas become blighted by anti-social behaviour and the number of vehicles brought into the city by guests causes traffic and safety issues.
But if you have a short-term holiday let, this news shouldn’t alarm you too much. For one, there is currently no limit on the number of holiday lets in Edinburgh. Each planning case brought forward will be considered in line with the Council’s development plan and other material considerations.
Will England be affected?
There are currently no plans to introduce the same controls in any English cities (aside from London, which enforces planning permission for any property let out for more than 90 nights
a year), and while this might change in the future, the government will first want to see the impact they have on Edinburgh.
A report published in January of this year addresses some of the concerns of short-term rentals. The government’s Tourist Recovery Plan also includes a commitment to consult on the possible introduction of a statutory Tourist Accommodation Registration Scheme in England, although thus far it has not progressed.
Any new regulations would almost certainly affect the local economy if brought into force in England, as we expect them to with Edinburgh.
Short-term and holiday rentals play an increasingly important role in English tourism, not only by bringing in new income but also by the number of local jobs they provide. In fact, according to Airbnb, the sector brings billions into the UK economy and provides thousands of jobs. In Edinburgh, the platform has estimated a loss of £133 billion and 7,000 jobs to its local economy – eyewatering figures that many English councils won’t want to lose.
Striking a balance
The way forward is, as usual, a balanced one, with popular tourist locations considered on a case-by-case basis. There are many positive impacts with short-term rentals, but, when holiday rentals begin to outnumber residential homes, there are also negative ones too.
For those who already have short-term rentals, you don’t need to do anything differently. For those considering investing in a holiday let, or renting out a second home, the figures still speak for themselves. The average annual income for a holiday homeowner is £28,000 – nearly the average UK salary. And with the population of staycations still rising, now is a great time to invest, particularly in popular tourist spots.