Short-term lettings has been one of the biggest issues in Edinburgh’s property market of recent years. Since the introduction of new licensing and planning regimes in 2022, there has been a great deal of uncertainty over the properties allowed to operate as short-term lets – whether they were previously doing so or not.

The introduction of legislation by the Scottish Government meant local authorities were given powers to bring in new licensing rules for short-term lets. On the back of that, the entirety of the City of Edinburgh Council area was designated a ‘short-term let control area’, meaning that all secondary lets, which is the use of a dwelling that is not a principal home now requires a licence and planning permission/certificate of lawfulness, depending on the circumstances.

According to the council’s rules, if an entire dwelling is being offered by a new operator as a short-term let, planning permission is required before applying for a licence. However, there are no requirements to seek planning permission for home-letting or home-sharing licence applications, as there is no change of use. Further to this, the use of the property as an occasional short-term let does not impact the availability of housing stock as it is already being used as a residential property.

The system is complex enough as it is, but the way the legislation has been written has created disconnections between each aspect of it. Our freedom of information request last year revealed that, on one hand, the refusal rate for certificates of lawfulness for existing short-term lets has been 25% – a significant number, but relatively low. On the other, 566 of the 632 validated planning applications have been rejected – a rate of 90% – even though many have been granted licenses.

When the new system was introduced for short-term lets, much of the focus was on the licensing side of the rules. Yet, these numbers show it is the planning system that is causing so many problems for operators and proving the most difficult to secure. We have seen a number of instances where people who let out their principal residence for a few weeks while travelling for business have been served enforcement notices, even though the rules suggest they should not need planning permission at all because there is no change of use.

Before embarking on a short-term let venture, seek out professional planning and licensing advice before submitting an application for either. It is taking up to nine months to determine licences and up to six months for planning – during which time you’ll be unable to operate and, in all likelihood, face rejection on either. And, if you are considering buying a property to let out on a short-term basis, you may want to seriously reconsider, unless it is an existing licensed property – few cases appear to be getting through that involve a new operator.

In its current form, the short-term lettings system in Edinburgh for new operators has been set up to fail. If it is to stay the way it is in 2025 and beyond, there needs to be clearer communication and consistency about the process, who it affects, and in what way. Otherwise, too many people are going to be left in limbo and the city’s ability to accommodate its growing number of visitors is only going to suffer.

Karen Gatherum is a solicitor and licensing specialist at Gilson Gray