Those renting out a spare room, or their entire main home, could gain a temporary exemption which would exclude them from tests and requirements in relation to gas, electrical and fire safety, as well as on legionella.

However, professional operators like self-caterers and B&Bs will still have to comply with the mandatory conditions associated with short-term let licensing.

Councillors on the local authority’s Regulatory Committee agreed the changes after a 12-week consultation was held over the summer to gauge the experiences from residents and industry so far. Topics included were secondary letting, temporary exemptions, fees and the application process.

Targeted discussions with resident groups, industry bodies and other key stakeholders led to 780 responses being submitted. This led to the council recommending some changes to policy in these areas which reflected feedback, legislation and fees.

A further report will be considered in May 2025 that proposes extending secondary letting licence renewals from one year to three years.

Regulatory convener, Councillor Neil Ross, said: “The council’s short-term lets licensing policy is helping to ensure holiday lets are safe and properly regulated in our city as over 4,400 applications have been granted since it was first introduced in October 2022.

“I welcome the changes to reduce licence fees for residents looking to Home Share and to make temporary exemptions for Home Sharing and Home Letting less onerous, while at the same time providing robust regulation of the short-term let industry. I’d like to thank all of the residents and businesses across Edinburgh who took the time to tell us how the scheme is working for them.”

The main trade association for the Scottish self-catering industry believes the changes are a recognition from the council that the regulations are not working and would continue to jeopardise the Festivals in their current form. However, they criticised the “part-time approach” to health and safety which undermines the entire purpose of STL licensing set out in the Scottish Government’s legislation, and risks further incentivising the black market.

The Association of Scotland’s Self-Caterers (ASSC) argues that a level playing field for all types of STL 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 the short-term let regulations are harming the capital’s economy and threatening the viability of the Festivals. However, rather than fully resolving the issue, it simply undermines the entire purpose of the Scottish Government’s short-term let licensing regime.

“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.

“Legislation at a national level remains unfit for purpose, especially the conflation of short-term let planning and licensing systems. We now have a situation where responsible and professional operators have spent thousands complying with licensing but are being systematically shut down through onerous planning requirements – only for the door to be opened to unregulated and potentially unsafe accommodation.

“Councillors need to ask themselves: will Edinburgh’s position as a leading visitor destination be enhanced by allowing visitors from around the world to stay potentially unsafe accommodation? Do properties suddenly become safe during the month of August but then dangerous the remaining eleven months of the year?

“Small businesses like self-catering have helped provide accommodation for Festival goers and performers for decades. Our industry wants them to succeed but we need safe, reliable and quality accommodation for that. Edinburgh Council must look at other ways of addressing this crisis and the sector stands ready to work with them to this end.”