x
By using this website, you agree to our use of cookies to enhance your experience.
By Calum Allmond

Head of Architectural Services, DM Hall Chartered Surveyors

OTHER FEATURES

Net Tightens On Airbnb - So What Next For Landlords?

Talk is getting louder about restrictions surrounding Airbnb and other short let platforms - and nowhere is the volume greater than in Scotland. Edinburgh in particular may become the poster boy for those who want crackdowns on the proliferation of Airbnbs.

So in that case - and in that city in particular, perhaps - what are the options for mainstream landlords and owners? One of the city’s most authoritative experts, Calum Allmond of DM Hall Chartered Surveyors, gives his view.

It was always on the cards that if restrictions were to be introduced on short-term letting in Scotland, Edinburgh would be first out of the blocks. And, sure enough, the council last month introduced a city-wide “control zone”.

Advertisement

The capital, which for obvious reasons is the country’s tourist Mecca, has become a magnet for Airbnb-style short-term lets over the last decade, leading to concerns about housing shortages and perceptions about anti-social behaviour.

Under draft proposals which will now go to Scottish Government Ministers for final approval, property owners will soon need planning permission to be able to operate short-term lettings and will have to apply for a change of use certificate from the planning department.

What is less well known is that the council has always had the power to require planning permission in the event of a material change in environment, such as short-term rentals. The difference is that, from now on, this will be mandatory.

It should be noted that the proposals only apply to secondary lettings, i.e., properties which are not an owner’s primary residence. People will still be able to let out their homes while on holiday, or rooms in their home while they remain in residence.

However, while the new restrictions appear to be forging ahead, it still remains unclear what policies the local authority will eventually apply. The current Development Plan – the overarching guide to future council thinking – makes no mention whatsoever of short-term lets.

Nor, surprisingly, does the document designed to replace it, the City Plan 2030, which again does not concern itself with the issue – making it increasingly difficult for property owners to plan ahead.

One can only speculate at the moment about whether permissions will be granted for continued short-term use, and on what grounds. Nor is there any clarity about whether numerical limits will be imposed.

Were there to be limits, it would be reasonable to assume that applications would be allocated on a first-come, first-served basis, so landlords hoping to remain in the market might be advised to act sooner, rather than later.

There is, of course, an existing provision in law whereby if a short-term let has been operating for more than 10 years, with no action against it by the council and no action to conceal its operation, then it is entitled to a Certificate of Lawfulness to continue operation, though necessary evidence will be required.

As of the start of this month, there have been nine applications so far this year for planning permissions for short-term lets, only two of which have been granted – and they both involved Certificates of Lawfulness.

What to do if applications fail is clearly now a matter of immediate concern for property owners and DM Hall’s specialist rural arm Baird Lumsden is currently embarked on an information campaign around the sales, letting and management options which remain open.

It has gone into the issue in depth, in anticipation that Highland Council will be the next authority to impose short-term let restrictions around the Badenoch and Strathspey area, and is reaching out to concerned parties.

Informed and impartial advice of this nature is something of a port in a storm for property owners who are caught between a rock and a hard place as the restriction net tightens.

There has been anecdotal evidence of landlords exiting the short-term market and moving to longer lets in the private rental sector. But regulation in this sphere of activity is getting stricter all the time, and the imminent New Deal for Tenants will do nothing to ease landlord pain.

On a superficial level, it is easy to understand the council’s hope that properties taken out of short-term lets will find their way back into the housing stock, thus easing ongoing shortages.

But a counter-argument, articulated by bodies such as the Association of Scotland’s Self-Caterers, is that lack of house-building is as much of a contributory factor to shortages, and that short-term lets bring in huge volumes of valuable tourism revenue to the city.

As things are, some smaller operators may indeed be forced to sell up and quit the market, although larger letting concerns will almost certainly continue to jump through the necessary hoops.

In this volatile environment, expert professional advice is the only real safeguard, and prudent property owners and landlords will seek it out as timeously as possible.

*Calum Allmond is Head of Architectural Services at DM Hall Chartered Surveyors*

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • icon

    Because the homeless would obviously be living in these city centre flats if they weren't air bnb's wouldn't they?

    icon

    Max
    This time you’re not that wrong!

    Many students used to rent in the old town (near the University but right beside the Royal Mile etc.) for term time and, after a quick refurb, landlords rented to tourists until the new term started.

    In December 2017, the SNP banned fixed term tenancies mutually agreed by landlord and tenant which meant landlords could no longer force or trust students to leave promptly in time and thus plan for tourist rentals. As a result, many landlords moved to short term lets all year round, making far more money and having sufficient voids to keep the properties well maintained.

    The students had to move further afield into residential areas, much to the consternation of their new neighbours! Scottish students can afford higher rents as they get “free” University education, subsidised by higher income tax paid by all Scottish taxpayers earning above the average wage and huge fees paid by rich Chinese students (perhaps made wealthy through forced or slave labour?).

    Families were therefore priced out from their previous homes and YES – no doubt some ended up homeless!

    The SNP’s answer is NOT to repeal their current anti-PRS legislation but to bring in MORE!

    We shouldn’t be surprised as their track record includes:
    • Procuring ferries on variable cost contracts rising from £97 million to over £250 million
    • Buying up a shipyard but placing new ferry orders in Turkey
    • Buying an airport and then getting into bed with the Greens who want to ban air travel
    • Investing in a wind turbine fabrication plant but placing orders in the Far East instead.
    • Abolishing bridge tolls so they could no longer afford to carry out routine maintenance on the Forth Road Bridge, resulting in its unplanned closure for many weeks.
    • Building a new bridge across the Forth that needed to close every tie ice formed on its cables. (This one is needed to augment the old one which was not properly maintained)
    • See the next post for their successes to date in the PRS sector!

     
  • icon

    Great Work by the Scottish Government . The New Deal for Tenants.

    One report states that there were 222570 fewer rental properties in Scotland, between 2016 and 2019. Also
    According to a City Lets report 3 Feb 2022. Rental stock has reduced by 32% s1nce 2018 . To an all time low. Rents have also reached to an all time high . A 3 Bed in Edinburgh average price £1531 PCM . So it`s all going quite well really.
    So unless your wedged up. The new deal for Tenants will probably be no deal.

  • icon

    Hard to make sense of some things. Rishi Sunak talking about reducing tax on fuel by 5p, only months ago it was £1.32 now local Esso garage £1.89 what difference is 5p going to make.

    icon

    £1.89 instead of £1.94.

    Michael, you disappoint me!

    I thought you were old enough to have been taught properly?

     
  • icon

    Knocking down 5 new 6 bed £1m houses near Bolton, in Breach in Breach of Planning rules by size and site positioning, surely some compromise could have been found with Council instead of Demolition and at a time crying out for housing. I can imagine they would be fine houses for £1m in the Bolton area. The Council should cherish a Developer willing to make this huge Investment in such a deprived area. Instead of flexing their muscles to let them know who’s Boss.

  • icon

    I tend to take a different Jew Michael, developer’s tend not to make mistakes, the make a calculated decision to ignore the planning rules to get a higher yield, most times the council’s back down…. But not always, the latest P&O debacle is a good example of brinkmanship, there has to be a line made, if not then watch the flood gates open. I agree with the council.

    icon

    Simon

    I agree the developer shouldn't be allowed to profit in this case - but surely the homes could have been confiscated or compulsorily purchased and sold - with the profit going into the public purse?

     
icon

Please login to comment

MovePal MovePal MovePal