Holiday Lets, Airbnb and our Housing Crisis

Gordon Maloney from Living Rent on the fight back against holiday lets and what’s next?

Across Scotland, short-term holiday lets are devastating communities. In parts of Edinburgh, there are now more holiday lets than ordinary flats for rent. In some areas in the Highlands, almost 20% of homes are Airbnbs.

And while the figures for the number of holiday lets are shocking, the truth is that we don’t really know the full scale of the problem. Most available statistics only include listings on Airbnb.  However, there’s a number of other, similar platforms, and an unknowable number of properties being rented out in more informal ways. And that’s a big part of the problem – right now, the complete lack of regulation means we don’t even really know what’s going on.

The impact these holiday lets have doesn’t really need spelling out – every property rented out as a holiday let is one less home for a family to live in. They drive up rents, break up communities, and put a huge strain on local infrastructure.

The situation is at breaking point. That’s why it’s so important that the Scottish Government is finally promising to introduce new measures to crack down on short-term lets.

There is, of course, still a lot of work to be done, but it is hard to imagine that we would be here without the tireless efforts of tenants and campaigners all across Scotland.

How did we get here?

Lots of groups and organisations across the country have done a lot of work to make this happen, and Living Rent has been a huge part of that. We’ve been campaigning hard for exactly these sorts of new measures:

It’s proof (if ever we needed it) that tenants and communities organising and building power can force governments to act in our interests. That said, there are big questions hanging over what they’ve promised.

What have the government actually announced?

The announcement Kevin Stewart, the Housing Minister, made was pretty light on detail. He announced broadly three things:

  • A new licensing scheme for short-term lets
  • New powers for councils to regulate holiday lets, including the ability to designate so-called “control areas”
  • New taxes on these sorts of leases

But beyond that, there isn’t really much detail – and that’s cause for concern. Three of the key questions will be:

How will these powers apply to existing holiday lets? The problem is already wildly out of control in many areas, and if these new powers don’t allow councils to shut down existing holiday lets, then they won’t have the impact we so desperately need.

Where will the money raised from new taxes go? In some places, money raised from so-called tourist taxes is ring-fenced to further promote tourism – we absolutely can’t let that happen here. Living Rent has been calling for any new money to be set aside to improve local housing.

How easily will councils be able to designate control areas, and how easy will it be to set limits on the number of holiday lets within those areas? In 2016, the Scottish government introduced “rent pressure zones” which were meant to allow councils to introduce limited, localised rent controls in hot-spot areas. But the process was so convoluted that it has failed utterly, and no council has successfully used them, and we can’t see a repeat of that here.

And then, even if the government’s legislation is water-tight and strong, we still have a massive challenge to force councils to use these powers to the fullest extent. Crucially, in places like Edinburgh, that has to mean shutting down huge numbers of the holiday lets currently in existence.

So what now?

Over the months ahead, Living Rent will be working hard to keep up the pressure on the government to make sure the legislation goes as far as it needs to, and on councils to make sure they use those powers. We can’t miss this opportunity to start to undo the damage holiday lets have done to our communities.

But the truth is that all of this is bigger than just holiday let leases or Airbnb. Scotland’s housing model is broken in really fundamental ways, and we need huge and radical changes. From slum conditions and sky-high rents to rough sleepers freezing to death on our streets, tinkering around the edges won’t do.

There’s lots of policies tenants need – rent controls, banning winter evictions, better protection from discrimination, stopping landlords from abusing deposit schemes, and the list goes on – but the only way any of that can happen is by building a strong, organised, fighting movement of tenants that can force the government to introduce them – and that can take on and beat landlords and letting agents for ourselves.

And that is exactly what Living Rent is doing – and why you should join and get involved: www.livingrent.org/join

 

Image credit: Maria Stoian @mariadraws and at mariastoian.com

Comments (12)

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  1. James Anderson says:

    Councils should impose business rates on Airbnb properties. These properties are easy to identify since they advertise their availability. Imposing an annual business rate would make most Airbnb properties commercially unviable thereby killing off this “black economy” loss to the exchequer!

    1. Graeme McCormick says:

      Most of these properties if commercially rated would be entitled to enjoy the Business Rates Small Bonus Scheme so would pay no rates.

      Properly enforced licensing coupled with an Annual ground Rent which will force the release of land for housing is what’s required.

      Far too much urban land is held by the public and private sector which would provide good quality housing.

      1. David Somervell says:

        Dear Graeme McCormick, Does the Business Rates Small Bonus Scheme not just apply where premises up to rateable value limit are involved? And not if more than X premises? Details at https://www.mygov.scot/non-domestic-rates-relief/small-business-bonus-scheme/. It means that at present someone renting out a property pays no business rates for a single property but if they have multiple properties they’d not be eligible for relief?

    2. Clare Galloway says:

      At least Airbnb income should be checked and taxed. The Italian govt do this (where I live), though I know that the multifarious foreigners who live in the town where I am and rent out their places on Airbnb, are unaware of this.

      Incidentally, I ran a very successful 2 room B+B for several years (everything taxed and accounted for, and registered with the local council, etc) as I got myself established here – but there was absolutely no competition with any other businesses, and there were myriad other properties empty and needing filled/ loved/ bought, my B+B brought a great deal of good money to the town, which was in a state of abandonment… plus cultural exchange, friendships, positive influence… Sp it was a win-win-win situation for everyone – but I was using my property to earn a living, and can very much understand why people use Airbnb ‘under the table’, just to afford to survive in such an expensive city.

  2. Michael says:

    Thank you. This is the kind of outline and detail that is so helpful with understand this critical issue. How can this information be better distributed into our communities?

  3. Alistair Taylor says:

    Private ownership and greed…

    Makes me nostalgic for the good old days of the 60’s when most of us lived in council housing (affordable).
    Dad went to work at the paper mill, Mum looked after the weans.
    We played fitba’ on the street (because there weren’t many cars) and ran in the woods until dark.
    (Now the woods are gone to a private development.)
    There was a real sense of community and neighbourhood. You could borrow a cup of sugar or flour when need be, Hogmanays were legendary and went on for 2 or 3 days.

    Now we’re all home owners with 2 cars and a flat screen TV. We don’t like the neighbours, and may as well vote Tory.
    (Ffs…)

    Anyway, keep up the good work, Gordon. Someone has to.

  4. MBC says:

    This is one of the most important fights going on in the battle against globalisation. I am not against globalisation per se, just certain of its negative effects on local communities. The bits that strip them of power and autonomy. Thatcher and Reagan released the controls that used to exist in the money supply. This meant that banks could access global capital and were awash with money from the 1990s onwards that they didn’t know what to do with. A large amount was lent out on property. Not only could you get 100% mortgages, you could get mortgages for second homes and even for buy-to-let properties. You could even get 105% mortgages. Yes, they would pay you to borrow money. Interest rates have been abominably low. This means that borrowing money is cheap, never cheaper. So all the more reason to do it if you can. But the impact was inflationary. With endless amounts of money being available, investing in property meant that investors were bidding more and more to secure properties. Fine, if you already have assets, (rising assets in property), as security, but for anybody not already on the property ladder by 1990, it got harder and harder to come up with the means of buying property, even if there were two of you in well paying jobs. Add to this Thatcher’s Short Assured Tenancy Act (1989) which did away with ‘fair’ rents (which could be decided by a tribunal) and introduced ‘market’ rents, meaning those who owned property could charge whatever they could get away with. So not only did house prices rise, but rents did too. Soon, even if two of you were in well paying jobs, all you could afford to rent was a rabbit hutch, effectively. Some aspects of Thatcher’s dreadful act have now been rectified – new tenancies will have security of tenure. But the Scottish Government has still to do something effective about ‘market’ rents to replace them back with fair rents, meaning, something that most people could afford without penury.

    And that, I suggest, it where the fight back must begin. We must apply a tourniquet to the patient to stem the blood loss (money) from local people. Well, too bad if a fair rent causes a landlord to have his profits squeezed. It’s about time. Everybody else has been paying for his holidays until now, including, btw, the public purse. The public purse has been paying out zillions to cover people’s housing benefit. It’s time for a reverse squeeze. So, Mr Landlord, feeling the pinch? Well, why not sell your property? Not worth as much as last year because of the pinch on rents? Well fine, you’ve been milking folk for the last 30 years. You’ve had your chips. Time to get out of the game, and take your ill gotten gains with you. Put your property on the market at a reduced ‘market’ rate and let some young hard working couple get it.

    Rent controls. That’s the answer. It will close the deficit as well, as 60% of the national budget is welfare costs, and the biggest element of welfare costs? Yep, you got it – housing!

  5. Clare Galloway says:

    Where I grew up, a clachan on an island hillside, there were 10 houses, and for much of my childhood, at least 8 of them were used only in the summer or at weekends by city folk. The whole Airbnb thing is very different, but not entirely so. Whatever external ownership and leaving-empty of homes goes on, it means a huge effect on the community. Ultimately, my whole island was geared towards visitors, and not towards locals remaining there once they finished high school: everything flowed that way, from short-term winter lets and horrendous caravan accommodation in the summer when those lets ran out… It all paved the way for the current situation with widespread acceptance that we simply move and make way for visitors.

    I know folks who rent out flats in Edinburgh and let out cottages on the island – some do so out of need to keep up an incredibly ‘comfortable’ lifestyle, e.g. retired on the island, and others are struggling to make an honest wage, just getting-by in the city – raising their children and paying rent or mortgage on another flat where they live.

    The nature of the beast is that if it is a commodity, people will use it as such, but if we can get across a bigger perspective (as we’re doing here), things can be less ‘us versus them’ and more ‘how can we all be in this together, for the better of the whole?’

    I hope that it’s just no-one realises the depths of the negative effect that they’re having on the community, the local economy, etc: that if they understand more about
    the long-term accumulative effects, and how their individual actions impact…. if we can get more information about knock-on effects, real-life stories, actual voices from people who e.g. have left the place or even the country – it would make a powerful bigger picture, and build a sense of what we might gain: to both bring our diaspora home and to lift the level of life quality and stability for those who live in Scotland.

  6. Doghouses Reilly says:

    A good part of the answer is real growth in the supply of social rented homes. For all the money that has been invested over the last three years, about 60% of which has come from rents, not grants, we have fewer council and housing association homes than we did in 2015.

    And it’s pretty clear that the SG intends to cut the programme again after 2020. Perhaps even more than the cut imposed in 2010.

  7. Colin Campbell says:

    Short term letting is not the issue. The government needs to build far more affordable houses and also build them in much greater numbers in the Highlands & Islands. My understanding is that of the 50000 affordable houses built in Scottish by the Scottish Government 95% of these were built in the central belt. Other point is that if we take say a city like Edinburgh. Typically I would imagine most Airbnb flats would be valued in excess of £200k. If that is the case the we are deluding ourselves that forcing the owners to sell or rent on long term basis – long term they would still attract circa £1000 per month rent. That is not affordable housing!!
    So back to the point – Build more Social and affordable houses and build them everywhere!!

  8. Clare Galloway says:

    Re: ‘short term letting is not the problem’ by Colin above – tell that to families who are thrown out of properties in the early summer, to make space for affluent visitors or the owners’ good-weather occupation – or just put on the street on a whim after a few months because the owner wants domination over their property/ doesn’t feel like renting it any more/ doesn’t like the person renting, who might have Real Life problems or a child/ too many children or whatever.

    I have school-friends of my age living in caravans, because there is literally nothing to rent – either long-term or affordably. Can you imagine what that does to the psyche of a person: to know for a fact that THEY WILL NEVER HAVE HOME SECURITY; not just never own their own home, but know that the eventual obliteration of any housing opportunity is inevitable, because everyone sees it as a viable, free, unregulated option, to just shove a listing up on Airbnb or whatever.
    Folks like myself have left the country specifically because of the impossibility of a lifestyle of moving perpetually, and knowing that I have to bide by an often vindictive or aggressively controlling or at best unreasonable landlord…

    *The problem is not one thing or another*: it is vast, complex, specific to each place, interconnected, evolving: we need to have such a wider view of it. New houses are part of the solution, but look at what happened to the council housing stock. There are many places, especially on islands, where building new houses is extremely complicated, just takes too long and/ or it’s impossible: there simply are not the property-building envelopes.

    And there will still exist the profoundly destructive issue of ‘Stupid Money’ (as spoken about in the comments under https://bellacaledonia.org.uk/2020/01/06/coming-off-the-cultural-fence/) – the terrible effects of money coming in via privileged wealthy visitors/ retirees to places, who do not understand their influence on a place, people and culture.
    Not just house prices rise, but every aspect of life becomes unaffordable for the indigenous community: the folks from a place are left with the only option to escape to e.g. warmer climes and cheaper cultures, where they can at least begin to subsist at an acceptable quality of life – i.e. at least the winter will not kill them if they don’t have money to heat their home.

    One friend from the island spoke about ‘nothing being done’, ‘nothing will happen’, ‘nothing can change’ and ‘there’s no point in speaking out’ – ground down by decades of trying to protest and even be heard by council – they’re starting to plan an escape to a warmer climate (where there is a lot of cheap property lying empty).

    Scotland is losing its most talented and creative, passionate and intelligent peoples from its island and rural cultures (and now cities too): all of us who have little interest in slaving to the grind/ burning out completely whilst living in dire, insecure hovels. Most of us slip away quietly, as we are utterly wrung-out by our situation.

    I feel it would help to have more voices directly from the islands, etc. heard: we can all stay numb about this immense problem, if we’re just seeing anonymous, generic profiles, and statistics that ‘sound shocking’ but have no real connecting factor to human beings’ suffering unethically.

    There is an infinite wealth of culture and humanity hidden between crushing layers of economic strata; condemned to lives of severe stress and humiliation, whilst others feed to obesity off what should have been their birth right.

  9. Colin Thomasson says:

    The flat below mine is given over entirely to air bnb, and there is nothing to stop every other flat in this central Edinburgh tenement being bought up by absent landlords for the same purpose, as is the case in at least one tenement in the High Street – the Royal Mile- in fact, the one that was an award winning design for Council houses by Sir Basil Spence , adjacent to the restored Queensberry House, behind the Holyrood parliament that is in fact entirely air bnb landlord owned -this I know as I worked for one of them…and god know how much more of that street, what was in fact, Edinburgh, until relatively recently, now a ghost town of tartan tat mongers, and there is nothing being done to preserve these Scottish communities and many more, no doubt from this plague of community and life destroying greed by wealthy ‘ investors ‘
    Just exactly like the privatisation of the ” Edinburgh Hogmany ” which is nothing more than the criminalization of residents and the theft of the city centre by the Council for private profit at public expense, corruption of public property & parks, in short.

    I have only one question : whom do the politicians responsible for this despotic state of affairs serve ?

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