The Scottish Government has approved the City of Edinburgh Council’s proposals to designate the entire council area as a Short-Term Let Control Area.
In addition, after years of planning, short-term let licensing schemes will shortly be launched in Scotland.
Here’s an overview of what these significant developments will mean for short-term let landlords and for us, as a letting agent.
First though, we’ll look briefly at this new legislation and why it has been introduced.
What are short-term let licensing schemes?
Local authorities in Scotland are required to set up short-term licensing schemes by October 2022. All existing short-term let landlords will then need to apply for a licence by April 2023 and all short-term let rental properties must be licenced by July 2024.
The licence application will include a fit and proper person test for all named applicants, and a list of mandatory conditions that must be met; these requirements include health and safety, maximum occupancy, and appropriate insurances. Additional conditions may also be applied to address any specific local concerns.
You can find further details about licensing schemes in our previous news article, Short-term let licensing schemes approved in Scotland. In addition, you can give your views on the development of a licensing scheme in Edinburgh in the council’s Consultation Hub – open until 5th September 2022.
What are Short-Term Let Control Areas?
Short-term Let Control Areas allow councils in Scotland to regulate and manage the number of short-term lets in specific locations. These may be whole or part of council areas and are designed to complement short-term let licensing schemes.
Councils must apply to the Scottish Government to designate a Short-Term Let Control Area. Once approved, a short-term operator of a property within a control area must apply for planning permission to change the use of the property from residential to commercial before applying for a short-term let licence.
The City of Edinburgh Council is the first Scottish council to have plans for a short-term let control area approved.
You can read more in our previous article, City of Edinburgh Council proposes city-wide Short-Term Let Control Area.
Why has this legislation been introduced?
The Scottish Government has introduced licensing and control areas as means to allow local authorities more control over the number of short-term lets operating in specific locations. This follows concern over the rapid increase of short-term rentals and their impact on local areas – particularly in Edinburgh. The legislation aims to achieve an area-appropriate balance of local community needs, wider tourism and economic benefits and a quality visitor experience, ensuring that guests and neighbours are safe.
What do the changes to Scottish short-term let legislation mean for landlords in Edinburgh?
The Short-Term Let Control Area in Edinburgh means that short-term let landlords must now apply for ‘change of use’ approval through the planning application process. Landlords must apply for the change of use before they can apply for a short-term licence.
The City of Edinburgh Council will use the legislation to decrease the number of short-term lets in the city, therefore we expect that most change of use planning applications will be declined. It is expected that most properties in communal blocks and with shared access will not be granted a change of use.
Further to this, we expect the cost to a landlord for applying for the planning change of use and for a short-term let licence to be around £1,000 (based on an average two-bedroom flat). We urge landlords to carefully consider the likelihood of their application approval before committing to the application process.
What do the changes to Scottish short-term let legislation mean for At Home In Edinburgh?
Given the nature of many of our current short-term properties, we sadly expect that most will not be granted a planning change of use and therefore, will not be granted a licence to operate as a short-term let.
We have now taken the difficult decision to cease managing short-term lets from the end of 2022.
New opportunities for Edinburgh letting
Going forward we are excited to focus on managing and building our portfolio of private residential properties (often referred to as long-term lets). We have already spoken to all our current short-term let landlords to explain our decision and have discussed the options open to them, including a change to long-term letting.
This is an exciting time for the long-term letting industry, with a robust and buoyant Scottish market withstanding current and recent challenges. Properties across Edinburgh are in high demand, with Citylets’ latest industry report showing an undersupply of long-term let properties compared to demand.
Edinburgh rent levels reflect this, with the Q2 2022 report finding average rents at an all-time high, at £1283 per month. In addition, the average time to let was just 15 days.
This change in focus to long-term letting creates new opportunities, both for our clients and for our team. We’re keen to consider how we can further support landlords, tenants, and investors, continuing to build on the high levels of service for which we have become known.
We’re still here to help
We value every client, and we have enjoyed working with all our short-term let owners for over a decade. We hope we can continue working with our existing landlords – but we’re here to help all short-term let landlords who may need some guidance.
Our friendly team are experts in the lettings industry and in the local rental property market, so please get in touch. We’re happy to chat through the likelihood of your property receiving planning and licence approval or to answer any questions you may have about how long-term property management works or average long-term rental yields in your area.
We also offer a free property assessment service which gives you a no-obligation rental evaluation. You can book online, and we’ll give you an honest appraisal of your property’s potential, including expected long-term rental values.
Get in touch!
Give us a call on 0131 229 4001, email via our contact form or pop in and see us at 39 Warrender Park Road, Edinburgh, EH9 1EU.