AIRBNB has called on the City of Edinburgh Council to ease its “draconian” rules on short-term lets in the capital, citing the impact on rent, house prices and the local economy.
In a statement shared to its website on Sunday, the company shared findings of research it had carried out in the year since the restrictions were introduced.
As of 1 October 2023, any Edinburgh property used for short-term or holiday lets must have a licence to operate, and in most cases, planning permission for a change in usage.
As a result, rent and hotel prices have reached record highs, and guest bookings fell by 13% during the Fringe as supply constraints priced out guests and performers.
Edinburgh only grants secondary letting licences for one year at a time, which the company says is restrictive and brings about uncertainty for hosts, as well as higher costs.
Most applications are also turned down, a higher refusal rate than other parts of Scotland.
The changes came following a Scottish Parliament act requiring local authorities to regulate short-term lets.
They aimed to better manage the sector and combat issues such as noise and anti-social behaviour to protect neighbouring residents.
Airbnb called Edinburgh’s approach “extremely stringent” and wants to see the rules relaxed by changing the licence fees and length, and planning guidelines.
The company’s analysis showed that rent in the city has shot up by 13.9% in the last year to a record high average of £1,376, almost twice the increase in the rest of Scotland.
This is despite a reduction in the number of self-catering rentals qualifying for non-domestic rates over the last five years.
The average house price, which was falling, has risen by 6.5%, again higher and faster than the rest of the country, with the average hotel price also up by 11.5%.
During the Festival Fringe, which draws thousands of people into the city, Airbnb guest numbers and the average stay length both fell this year compared to 2023.
This is partly due to a reduction in accommodation supply, which inevitably led to price increases which prevented some performers from attending the festival.
A study conducted in October 2024 also suggested that decreasing short-term lets by just 0.5% could cost the city’s economy £57m, due to the jobs and money they bring in.
The company summed up its findings by recommending the council work on a “more proportionate planning policy”.
It stated it would help hosts offer affordable stays, support local businesses and benefit from visitors.
Speaking in the statement, Amanda Cupples, Airbnb general manager for Northern Europe, said: “Edinburgh’s draconian approach to regulating short-term lets has failed to ease the affordable housing crisis.
“Instead, housing costs and hotel prices have hit record highs – rising higher and faster than the rest of Scotland – and guests have been priced out of visiting the city and attending its major cultural events.
“Data shows there is no upside to Edinburgh’s outlier approach to regulation, and we encourage the city to explore a more inclusive way forward.”
Speaking today, council leader Cammy Day said: “Council Leader Cammy Day said:
“We have the world’s best and largest collection of arts festivals, of which we are immensely proud. And it is in part due to their growing popularity over the last decade that we are experiencing increasing demand for accommodation in the month of August.
“Market rates affect tourist accommodation during August, as they do Edinburgh’s property prices and rents all year round.
“As is usually the case when demand is high, this means prices go up and over the last decade, prices have therefore steadily been increasing. This is not a new or unusual phenomenon.
“Central areas will tend to command higher accommodation prices, but with Edinburgh being such a small Capital city, it’s incredibly well connected and welcoming. There are varied accommodation options in our amazing communities which are well worth exploring.
“While the Council has no direct influence over market rates, we are pleased to see new hotels open all the time which is expanding the accommodation options Edinburgh has to offer.
“I continue to firmly believe that everyone benefits from Edinburgh’s thriving visitor economy, but it has to be managed and sustainable. Our short term let controls have been an important step in the right direction.
“Our new regulations have been in place for over a year and early signs are promising that they are helping to keep visitor accommodation safe and well managed in Edinburgh.
“We’ve always said that it is important to monitor their impact and so we recently asked businesses and visitors how they’ve found the changes.
“We’re currently considering all of the feedback we received at the moment and will report back to the Regulatory committee in the coming months.”
