Licensed, safety-checked and refused: the flaw in Edinburgh's short-let system

The BBC today reports that around 800 of Edinburgh's 1,754 licensed short-term lets have been refused planning permission but are still operating. The figures come from analysis by the tenants' union Living Rent.

At STL Solutions, we help hosts through licensing and planning every day. We believe the rules should be followed. But the BBC story misses the real issue: the system itself is broken.

According to Living Rent's analysis, all 800 of the homes refused planning hold a short-term let licence. To get that licence, each one had to pass numerous checks, including the fitness of the applicant, the safety and standard of the property, and the likelihood of the use resulting in undue public nuisance, all within a system that allows neighbour concerns to be considered before a licence is granted.

Despite this, homes that have passed these checks are being targeted for enforcement action, despite many owners trying their best to comply with all relevant licensing conditions (including those around planning).

This all takes place against the backdrop of a planning system which struggles (despite the best efforts of Planning Officers and Appeals Reporters) to be clear, accessible or consistent on the matter of whether a given short-term let property even requires planning permission in the first place.

Licensees trying to engage further risk invoking planning enforcement action just by becoming "visible" to the planning system.

Meanwhile, the demand for short stays is being met, in many cases, by people who never engage with the council, have none of the right safety documents in place and have taken no steps to engage with planning authorities at all.

The numbers in context

Short-term lets are a very small part of Edinburgh's housing.

• Around 0.5% of homes. The Association of Scotland's Self-Caterers (ASSC) puts professionally run short-term lets at about half a percent of the city's housing stock.
• Empty homes outnumber them. Research by BiGGAR Economics found secondary short-term lets make up 0.8% of Edinburgh's homes (with many of these being temporary uses), while empty properties account for 3.6%.
• Nine in ten planning applications refused. Of 632 short-term let planning applications to the council over two years, 566 were turned down, according to data obtained by law firm Gilson Gray.
• A real part of the economy. Short-term lets add £154 million a year to Edinburgh's economy and support 5,580 jobs, according to the BiGGAR report.

Why a black market exists

The simple answer is demand for accommodation and lack of trust in the current systems.

On the one hand, people need somewhere to stay for a few days or weeks, and a hotel room is not always the right fit. They include:

• families on holiday who need a kitchen and space for children
• people working on contracts or projects in the city
• relatives visiting family, or supporting someone in hospital
• people relocating for work or waiting to move into a new home

That demand does not go away just because the legal supply is capped. If there is not enough licensed, approved accommodation, demand moves to properties that have not been checked at all. That is not good for guests, neighbours or the city.

The system at present is confusing and opaque, with no clear legislation signposting landlords, the public, or authorities to what types of short-term letting might require planning permission. For example, in Edinburgh, only short-term let uses starting after 05.09.2022 "automatically" require planning permission.

"Home-letting" licensees are further exempted from an "automatic need", so long as the property in question is their "principal home", but there is no legislation setting out what represents a "principal home" from a planning point of view. For example, what is the situation where a licensee offers their only property as a short-term let for 5 months in a year, owing to them travelling for leisure or work? Does the property remain a "principal home" for the purposes of the licensing and planning systems? If not, at which point did the change from "principal home" to "short-term let" take place?

In all other cases, whether planning permission is required is a matter of "fact and degree" based on poorly defined (and often extremely nuanced) "planning considerations" which may "vary in case to case."

What is more, decisions on these matters often appear arbitrary. It is well known that City of Edinburgh Council refuses almost 100% of short-term let planning applications related to existing dwellings. Whilst there have been successes on appeal, there is a concerning lack of consistency in decision making even amongst DPEA Appeal Reporters. Some properties have been held not to require planning permission to operate as a short-term let, whilst the owners of other (objectively similar) properties have been told that planning permission is required.

In some cases, different decision makers, each equally expert and impartial, have arrived at directly contradictory conclusions on very material questions related to short-term let use of the same property.

None of this is to question the professionalism of Appeal Reporters, but rather to point out that which many politicians appear not to recognise. The current system is inaccessible, extremely nuanced and inherently prone to produce necessarily subjective and potentially arbitrary results. Where a system is confusing, and where the law is not being "seen to be done", people will simply not engage.

This is particularly true where engagement itself might be punished (for example, by subsequent enforcement action if an application is refused, as recently hinted at by Edinburgh Councillors).

A proportionate fix

We think there is a better way to manage current demand for short-term let accommodation, and to make the system useful to authorities, the public and operators.

Keep licensing. It works. It makes sure every property meets clear safety standards and that hosts can be held to account. Specific and reasonable concerns from neighbours can be addressed before a licence is issued, and licences can be restricted or revoked where a licensee fails to meet their responsibilities.

Those responsibilities must be knowable, however. This includes any responsibility towards a property's planning status.

Make planning clearer. Allow reasonable applications to succeed.

1. Set out more clearly what does and does not require planning permission

Amendments to Use Classes could go a long way here. For example, explicitly allowing for a dwelling to be used for short-term letting up to a certain number of days in a year would address the confusion around "home-letting", or at what point a property is no longer likely to be considered a "principal home."

The creation of a "short-term let" Use Class would similarly go a long way towards providing clarity, underpinning an uncertain and necessarily subjective system of individual assessments with an accessible and more easily utilised statutory framework.

Without this, people will remain wary of engaging with a planning system they do not understand, and may be tempted to use "uncertainty" as a justification for non-engagement, with attempts to enforce against unlawful uses significantly hampered.

2. Apply development plan policies fairly, positively and constructively

Where this greater clarity indicates that short-term let use requires planning permission, the city must apply development plan policies fairly and in a positive and constructive manner.

Firstly, where neighbours write to genuinely support a planning application, or where the context makes it clear that the chances of disturbance are genuinely low, this must be taken into account.

In some cases, applications that have received consistent and fulsome support from neighbours have been refused on the basis that the use "would harm neighbouring amenity." Such conclusions are arbitrary and undermine confidence in a system which has the perception of being determined to find fault and which "only listens to the naysayers."

Secondly, whilst we do not seek to downplay the current housing difficulties in the city, it must be recognised that the short-term let control area's confirmation was not intended to justify a blanket ban on short-term letting.

There are numerous properties in the city which are less than suitable for long term residential use, and which could better serve as self-catering accommodation. The city's planners and councillors must recognise this and must give worthy applications a chance to succeed, irrespective of how granting any application might appear from a political point of view.

This is the role of local government if it wants to avoid the appearance of arbitrariness.

Aiming at the wrong problem

Edinburgh's housing shortage has much bigger causes, including too few new homes being built and thousands of properties sitting empty.

The aim of the licensing system in the city is to allow well-run, licensed homes to operate within a tourist-oriented city which benefits heavily from visitor spend. Planning-related confusion and the resulting (and rising) political frustration risk creating a backlash.

In recent weeks there have been reports of key boxes being glued shut, anti-short-let posters appearing across the city, and organised "scavenger hunts" to "track down" holiday lets.

Similarly, our clients (including women visiting their properties alone) have reported being placarded or accosted within buildings by those "protesting" against their short-term lets. Single female travellers renting licensed and compliant short-term lets have reported being approached by strangers who claim that their accommodation is "illegal", even when this is demonstrably not the case.

These often intimidating and potentially extra-legal efforts are aimed at less than 1% of the city's homes, and in many cases at those who are taking all the steps required of them (in good faith and in less than clear circumstances) to meet their obligations.

Enforcement is a job for the council, not for members of the public, particularly under circumstances where understanding of what does and does not represent legal compliance is generally so poor.

Behind the vast majority of short-term let uses is a person trying to make a living. Most operators are not wealthy portfolio landlords. We must also remember that, in many cases, operators entered the short-term let market under circumstances where it was not at all clear that any planning concerns would result from short-term letting, and at a time when these matters were almost entirely uncontentious.

As late as the end of 2020, City of Edinburgh Council were content to confirm that the short-term letting use of flats did not, as a general proposition, require planning permission at all. It was on that basis that many elected to give up other businesses or careers to pursue short-term letting. Should such people now be punished because of changing political considerations, particularly where the law on the matter has been and remains so unclear?

We would also pose some other fair questions:

• What number of short-term bedspaces do the authorities and other interested parties such as Living Rent think is right for a city such as Edinburgh? Zero is not realistic for a capital city that welcomes millions of visitors and where over 30,000 jobs are supported by the tourist economy.
• Is a predominantly unregulated market, where unchecked properties can flourish, preferable to a licensed system that provides clarity and fairness and can cope with real demand?
• Is it really the intention that licensed, well-run operations are punished, enforced against and pushed out while unlicensed lets fill the resulting gap?

Short stays are not going away

Self-catering has been part of how people visit, work and stay in Scotland for generations. The current approach risks treating the simple idea of staying in a home for a short time as something to be stamped out.

The real choice is not between short-term lets and no short-term lets. It is between a small, licensed, safe sector and an unregulated one. We would urge the council and campaigners to choose the first.

If you need help with a short-term let licence, planning application or renewal, get in touch with STL Solutions.

Sources

• Hundreds of holiday lets operating without planning permission, BBC News, 19 October 2026 (syndicated copy)
• Short-term rentals are vital to Edinburgh's success as a city, Fiona Campbell, ASSC, Edinburgh Evening News
• Report provides 'compelling evidence' short-term lets fail to impact Edinburgh's housing market, Scottish Housing News, 7 January 2025 (BiGGAR Economics for the ASSC)
• Short-term lets not to blame for Scotland's housing crisis, summary of BiGGAR Economics findings, Property118, 13 January 2025
• Almost 90% of short-term let planning applications refused by Edinburgh council, STV News, 20 November 2024 (Gilson Gray data)