Edinburgh council’s claim to restrict Airbnbs and other short lets in order to improve the city’s housing situation has been a failure.

That’s the view of Airbnb which says that one year after Edinburgh implemented new short-let rules, they have utterly failed to improve the city’s rental market. 

Since 2022, Edinburgh has taken an extremely stringent approach to short-term rental rules in Scotland. 

While advocates said Edinburgh’s measures were necessary to address housing and tourism challenges, analysis shows that since the rules were implemented, rents and hotel prices have increased almost twice as much in the capital as in the rest of Scotland. At the same time: before Edinburgh’s measures were introduced house prices were falling, but they have since increased; fewer guests are visiting Edinburgh; and many households and self-catering businesses have lost vital income. 

Airbnb is therefore calling on the council to take steps to ease the requirements through key changes to the licence fees and length, as well as planning guidelines.

Despite a 22% reduction in the number of self-catering rentals in Edinburgh qualifying for non-domestic rates since 2019, rents have soared 13.9% in the last year alone to a record high average of £1,376 in September 2024, according to UK government data. This is almost twice the increase seen in the rest of Scotland (7.6%) over the same period. 

The average house price in Edinburgh, which was falling as of September 2023, is now increasing again. House prices in Edinburgh have increased by 6.5% since this time last year, which is higher and faster than in the rest of Scotland.

The number of Airbnb guests visiting during the 2024 Edinburgh Fringe Festival dropped 13% compared to the previous year, and guests who booked on Airbnb reduced the length of their stay by almost 20% as reduced supply caused price increases across all accommodations this summer – including hotels. 

Airbnb adds that with a reduced number of festival attendees choosing to stay overnight or for shorter periods, the evening spending that supports local businesses is at risk. The everyday families who host will also feel the effects; a fifth of hosts on Airbnb in Edinburgh work in healthcare, education, or hospitality. Almost 80% of hosts also use the extra income to keep up with heightened living costs, and nearly half rely on the money to help afford their homes.

The short lets platform now says Edinburgh should ease its restrictive application of Scotland’s short-term let licensing rules.  

Airbnb has this month responded to Edinburgh council’s consultation on their implementation of the licensing scheme, highlighting several issues. 

“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” says Amanda Cupples, Airbnb general manager for Northern Europe.