Edinburgh [Adam Wilson on Unsplash]

Short-term let regulations impacting supply for Edinburgh Festivals

Scotland: There are growing concerns that Edinburgh will be unable to accommodate all of the performers and visitors who are set to attend the city’s renowned festivals this summer, including the Edinburgh Fringe Festival, due to the implementation of strict short-term let regulations.

Comedians and TV personalities have been taking to social media to criticise the mounting costs of finding accommodation in the Scottish capital this season, and the main reason for such a rise is the limit on supply, according to the Association of Scotland’s Self-Caterers [ASSC].

As per the latest figures released by the City of Edinburgh Council earlier this month, only 105 secondary short-term lets have been granted a full licence since the city’s licensing scheme came into effect on 1 October 2023.

The ASSC has stated that 1,800 self-catering units have so far applied for a non-refundable one-year licence, which could cost over £5,000, while many property owners who are still waiting for approval are currently not listing their properties for bookings over the peak August period.

The association is calling for the government to build more houses and address empty homes, instead of restricting self-catering business owners’ operations and their chances to earn additional revenue, and effectively causing some of them to shut their businesses entirely.

Fiona Campbell, chief executive of the ASSC, told Scottish Financial News: “This is a predictable mess. We consistently highlighted the dire consequences that would follow from a draconian approach to short-term let regulation and these forewarnings are becoming glaringly apparent. However, this may be the tip of the iceberg if yet more self-catering businesses close, with the difficulties faced this year being amplified in 2025.

“Short-term lets were scapegoated for all manner of ills and treated as a panacea for wider housing challenges despite the fact that they make up only 0.7 per cent of Edinburgh’s total housing stock. The reduction in the availability of this type of accommodation – an essential part of the tourism sector – is driving up costs. The Council once said there were 12,000 STLs in the city but just 105 secondary lets have been granted a full licence.

“Edinburgh is renowned for its unique cultural offering but such bungled policymaking over short-term lets risks damaging its position as a place to visit and do business. A world-leading festival city should be more than able to accommodate comedians yet it risks becoming a laughing stock of its own making.

“Even at the eleventh hour, industry stands ready to work with local and national government so we can fairly and effectively regulate the sector before irreversible damage is done,” she added.

Scottish First Minister Humza Yousaf, of the Scottish National Party [SNP], has faced a mounting backlash from holiday home and self-catered accommodation providers in Scotland after a bid to halt the 1 October national short-term let licensing scheme deadline last year was denied. Opponents of the SNP’s proposed rules included the Scottish Conservative & Unionist Party, which said the new rules would have a significantly detrimental effect on the Scottish tourism sector and wider economy.

Last September, analysis by the UK Short Term Accommodation Association [STAA] of housing land audits published by all Scottish planning authorities showed that there were 371,6121 homes waiting to be built nationally, amid claims that the short-term let sector has been scapegoated for wider issues surrounding the affordable housing shortage crisis.

The SNP is also said to be preparing to force families with rural second homes to pay double the amount of council tax they pay from this month, as part of proposals in a Rural Housing Action Plan, where holiday home owners will pay more for their properties that are not classed as main residences.

The party is aiming to make it easier for young families to purchase their first homes in rural areas such as the Scottish Highlands and Islands, while encouraging young people not to leave their communities in search of better job and economic prospects elsewhere.

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