The short-term rental (STR) market in Edinburgh has become an incredibly contentious issue. On one hand, the city is a cultural mecca, hosting the world-renowned Edinburgh Festival Fringe, which draws performers and visitors from across the globe. On the other, local residents and policymakers are grappling with housing shortages, rising rents, and concerns about over-tourism. The Scottish government’s response? A complex and, some argue, contradictory licensing scheme that has left many questioning whether lawmakers truly understand the sector they’re trying to regulate.
What's the deal with licensing?
In October 2022, Scotland introduced new licensing requirements for short-term rental properties. By 1 October 2023, all hosts were expected to apply for a license if they wanted to continue operating legally. The goal was to address housing concerns, bring STRs under regulatory control, and ensure safety standards for guests.
The Edinburgh Fringe dilemma
However, Edinburgh’s short-term rental market plays a vital role in the city’s ability to host the Fringe. Every August, thousands of performers and visitors flood the city, requiring an enormous amount of temporary accommodation that hotels and other stock simply cannot provide.
But the new licensing rules pose a serious threat to this delicate balance. By making it more difficult – and costly – for property owners to list their homes on platforms like Airbnb, the Scottish government risks creating an accommodation crisis during peak times like the Fringe. Already, performers and attendees have voiced concerns about limited options and skyrocketing prices.
In a recent development, Edinburgh announced it would relax certain short-term letting rules specifically for the festival period. This move is an acknowledgment of the critical role STRs play during the Fringe, but it also highlights the inconsistency in the government’s approach.
Mixed messages from lawmakers
The situation in Edinburgh is a perfect storm of mixed messaging and poorly thought-out policies. On one hand, lawmakers want to regulate STRs to protect housing stock and support long-term residents. On the other, they’re forced to make exceptions during events like the Fringe, where the demand for STRs is irreplaceable.
This lack of clarity is leaving hosts in a bind. Should they invest in licenses and meet the stringent requirements, or wait to see if the rules will change again? Meanwhile, guests and performers are left navigating higher prices and fewer options as uncertainty looms.
ASSC response: the regulations don't work
The Association of Scotland’s Self-Caterers (ASSC) believes the changes are clear recognition that the regulations are not working and will only serve to jeopardise the Festival in their current form.
The ASSC argues that a level playing field for all types of STR accommodation is required all year round and that the Festival accommodation crisis could be eased through safe and lawful means, including reforms to the city’s draconian planning regime to allow the remaining self-catering properties to continue to trade.
Fiona Campbell, CEO of the ASSC, said: "This change is an admission that STR regulations are harming the capital's economy and threatening the viability of the Festival. However, rather than fully resolving the issue, it simply undermines the entire purpose of the Scottish governments's short-term let licensing scheme.
"Ensuring the health and safety of guests is a 365-day operation which self-caterers are wholly committed to. However, a part-time approach is irresponsible and will simply be a boon for the black market which is already flourishing thanks to the squeeze in the supply resulting from the shambolic short-term lets policy."
The bottom line
Edinburgh’s STR situation appears to be a case study in how not to regulate an industry. While the need for oversight is arguably reasonable, the Scottish government’s inconsistent policies are alienating hosts, frustrating residents, and jeopardising key cultural events.
If lawmakers want to avoid an accommodation crisis and support the city’s vibrant tourism industry, they need to act now – by listening, learning, and crafting policies that reflect the reality on the ground. Until then, the question remains: do they really have a clue what they're doing?
What are your thoughts on Edinburgh’s STR licensing? Are you a host, performer, or guest affected by the changes? Share your experiences in the comments.
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