Edinburgh Becomes the First UK City to Clamp Down on Short-Term Lettings

4 mins
August 18, 2021

Edinburgh is due to become the first city in the UK where property owners will have to apply for planning permission to rent out their properties as short-term holiday lets.

The city is a hugely popular tourist destination and with limited properties available in the city centre, there is high demand for properties rented out on a short-term basis for tourists, instead of using a hotel. Approximately one third of Scotland’s holiday let properties are based in Edinburgh.

The demand for holiday lets has forced up property prices as they provide a really good return on investment and also the long-term rents in Edinburgh as buy-to-let investors can generate higher returns from short-term lets.

Residents in Edinburgh are unhappy about the number of properties being offered to holiday makers and the council have had to adopt a more stringent approach to ensure that there is a balance of short-term and long-term let properties available. Property owners who have operated short-term lets for over 10-years are exempt, but those who have operated their properties as short-term lets for a shorter period will have to apply for a change of use.

The Association of Scotland’s Self-Caterers have labelled the move as “wholly disproportionate and lacking in evidence” as they fear it will have an impact on the local economy. In 2020 self-catering holidays contributed £50 million towards Edinburgh’s economy. Instead, they are blaming the government for their housing policy as the rate of which new homes are being built is falling short of demand.

Liverpool Short Term Lettings Property Investment

Liverpool is the top destinations for short-term let property investment with property investors experiencing yields of up to 27.2% according to Portico Host.

Much like Edinburgh, it is a highly popular tourist destination, attracting tourists from across the globe. It’s thriving economy and big businesses operating in the city provide demand for short-term lets from workers who need to stay in the city for work. For further information, please click here.

Restrictions for Short-Term Lettings on Apartments

Apartments in city centres such as Liverpool and Edinburgh are ideal for the short-term rental model as they are low-cost and easy to maintain. Apartments are typically located close to the city centre and close to local amenities, as opposed to houses that are further away, providing a hotel like feel, but with all of the comforts of your own home.

Leasehold apartments often have restrictions on short-term rentals, as in many cases they do not allow sub-letting unless they are let on assured shorthold tenancies (AST’s), which are typically a minimum of 6-months. Renting an apartment on the short-term lettings model could mean that you are breaching the terms of your Lease and could result in costly legal action; therefore, it is critical that you seek legal advice on renting out your apartment on the short-term lettings model beforehand.

Bishop Square Liverpool Property Investment

Whilst Edinburgh council have taken extreme measures, it was predominantly because there is a lack of housing available to the city’s residents and it can be off-putting to neighbours of the short-term holiday let properties as of the constant change-over of people living next door.

A more responsible approach that property developers are now taking is to separate the apartments that permit short-term lettings, to those that only allow long-term lettings. This is a much more sensible and socially responsible approach to providing property for both markets to hopefully avoid more city councils like Ediburgh, having to take extreme measures.

Bishop Square in Liverpool permits short-term lettings to supply the demand in the Liverpool market. It is one building within a development of four blocks and is completely separate to those that allow long-term lettings on AST’s.

Just two studio apartments are left, available for under £100,000 each with forecast NET returns of 10%+ on the short-term lettings model. Click here for further details on Bishop Square Liverpool.

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