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Short term lets: The impact on Scotland’s housing system

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Izzy Gaughan
Written by Izzy Gaughan

The problem:

Short term lets, particularly Airbnb, have been high on the political and media agenda in recent months.

This is no surprise when you look at the figures. In the last year, Airbnb listings in Scotland have shot up. In 2016, there were 6,300 Airbnb listings in Edinburgh. By 2017, this was up to 9000 – almost a 50% increase in one year.

What’s the big deal?

While arguably great for tourism, when you put this increase into the context of a housing crisis, there is cause for concern. This trend is taking housing out of the market, leaving households who are looking for a home with an ever-narrowing choice of housing options.

Scotland is in a housing crisis; gripped by rising rents and a lack of housing availability across all tenures. In 2016, Shelter Scotland, CIH and SFHA research found that we need 60,000 homes building over the next 5 years in order to tackle the housing crisis. With 137,000 households on council waiting lists, and over 14,000 children homeless in Scotland last year, there is a serious housing shortage in Scotland. While short term lets can’t be held solely responsible for this, there is serious concern that the Airbnb trend is impacting Scotland’s already limited housing market.

Over half of Airbnb listings were renting an entire home, as opposed to 43% renting a room. This shows that short term letting is no longer part of a wider “sharing economy” as was said to be the case – properties are being rented whole, suggesting a direct impact is a reduction of housing stock.

Housing availability and affordability

In Edinburgh City Centre ward, 1 in 11 properties is a short term let. This is in a city and country already lacking enough homes. Short term letting risks exacerbating an already extreme affordability and availability crisis across Scotland.

Evidence shows that there are 53 residents to each Airbnb let in Edinburgh. This concentration surpasses other cities including New York, Berlin and Barcelona. The figure is almost four times greater than that of London, where there is an Airbnb listing for every 160 residents.

It’s difficult to track how much residential housing (either owner occupied or for private rent) has been transferred to short term letting. But there is agreement across the sector that the growing trend has an adverse effect on the supply of housing, particularly in places like Edinburgh where demand already exceeds supply.

Our concern is that this upsurge leads to some households having little choice but to take on a tenure they cannot afford due to a lack of choice, this will push people into financial difficulty, and could increase the risk of homelessness.

What do we need?

Scotland has no framework for regulating short term lets such as Airbnb. Shelter Scotland believes that there is evidence and scope to justify limiting the use of Airbnb and other short term lets across Scotland, until more can be understood concerning its impact on communities and housing supply.

There is appetite for this sort of action in Scotland: recently the Planning (Scotland) Bill was amended at stage 2 requiring all short term lets (being let out as whole properties) to have full planning permission. The Scottish Green Party has been particularly active on this issue through their Homes First campaign, led by Andy Wightman.

Shelter Scotland supports the use of a cap on the number of days properties can be let out, as is the case in many other European cities – Airbnb has proposed a 90 day cap in Edinburgh.

But what we’re really talking about here is a shortage of housing. To really tackle the problem, we need to build more homes. The root of concern around short term lets is a chronic shortage of housing across Scotland. The Scottish Government committed to building 50,000 affordable homes over the course of this parliament. But 2021 is fast approaching, and we must look to the next target to ensure there is a safe, secure and affordable home for everyone.

Read our full report about short term lets on the Shelter Scotland website.