Short-term lets not to blame for Scotland’s housing crisis

Short-term lets should not be blamed for the housing crisis in Scotland, according to new research.

Data by BiGGAR Economics reveals that short-term lets boost Scotland’s economy by £154m Gross Value Added (GVA) per year, supporting 5,580 jobs in Edinburgh alone.

According to the report, short-term lets only make up 1% of all homes in Scotland, with secondary lets at just 0.8% in Edinburgh — much lower than the 3.6% made up by empty properties.

The research classes secondary lets as a property whose use is primarily short-term accommodation, typically operating for the majority of the year.

Short-term lets do not influence rent levels in the PRS

BiGGAR Economics argue short-term lets do not influence rent levels in the private rented sector in Scotland.

The economic consultancy points to data from the Scottish government, showing that between 2023 and 2024, average rents in Scotland increased by 6.2% for two-bedroom properties and 10.7% for three-bedroom properties.

In Lothian, which includes Edinburgh, where there has been a significant decrease in Secondary Lets, the annual rent increases were 14.0% for two-bedroom properties and 17.3% for three-bedroom properties.

The consultancy says: “If secondary lets were a driver of trends in the private rented sector, then a significant decrease in their supply, as has been seen in Edinburgh, would have been expected to have downward pressure on average rents.

“However, the fact that average rents in Edinburgh have instead increased — at a much higher rate than the rest of Scotland — provides strong evidence that the number of secondary lets does not influence rent levels in the private rental sector.”

Short-term lets aren’t the main contributor of the housing crisis

The Association of Scotland’s Self Caterers argues that short-term let licensing and planning rules, have reduced the city’s overall contribution to the economic benefits these short-term lets bring to Scotland’s economy.

Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers, said: “This is yet more compelling evidence that short-term lets aren’t the main contributor of the housing crisis but are instead turbocharging local economies, with a £154m positive impact in Edinburgh supporting thousands of jobs.

“The current unbalanced regulatory framework does not reflect this reality and changes are needed before irreversible damage is done. City of Edinburgh Council should take heed of the report’s findings when considering their approach to planning policies and control areas to ensure the relatively small number of valuable short-term lets are protected.

“Through providing a robust and holistic analysis, this report shatters myths. Rather than the city being overrun by short-term lets, Edinburgh is in fact a hotspot for empty homes.

“For policymakers, the message couldn’t be clearer: you can’t solve a housing crisis by producing a crisis in Scottish tourism by decimating local businesses that underpin the local economy. Attention must shift to the real causes of the housing crisis.”

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