A decision by the Court of Session on Edinburgh’s short-term lets (STLs) regulation “drives a coach and horses through the council’s attempts to regulate the sector,” a city councillor has said.
A judicial review found the local authority’s interpretation of Scots law on holiday let ‘control areas’ was ‘unfair and illogical’.
Lord Braid said it was wrong for the council to introduce a blanket requirement for all owners of whole property short-term lets to obtain planning permission as part of their application for a licence.
Planning Convener Cllr James Dalgleish, said the administration would “acknowledge today’s judgement and will now consider our next steps in more detail”. He said: “We introduced the short term let (STL) control area to help us manage the number and location of STLs across the city. We continue to face uniquely difficult housing pressures with a small but densely populated city centre and fast growing population across the city as a whole.
“We have to strike the right balance between promoting our visitor economy while looking after our residents who live here all year round and, having just announced a housing emergency, it’s more important than ever that we find ways of bringing homes back into residential use.
“It’s important to point out that, following today’s ruling, residential properties that began being used as STLs after the control area came into force on 5 September 2022 still require planning permission. Those that began before that date may still need it and will be considered on a case by case basis.”
Greens’ planning spokesperson Chas Booth called on the council to lodge an appeal.
He called it a “devastating judgement which drives a coach and horses through the council’s attempts to regulate the STL sector.”
Meanwhile the Conservatives’ Cllr Phil Doggart said in light of the decision the licensing scheme should be paused completely “before we do something else that is ridiculously stupid”.
He said: “Senior officers should be thinking very seriously about the approach that’s been taken.”
The capital’s city-wide STL control area was introduced last year in a bid to tackle high concentrations of holiday lets.
The council said this meant all hosts who had let an entire property on AirBnB or similar accommodation providers for less than 10 years needed to seek planning permission.
However Lord Braid ruled this was “not only unfair, but illogical”.
He said under the legislation this automatic requirement only applied to STLs begun after 5 September 2022, when the control area was designated, whilst adding there would still be cases where the change of use of a property prior to that date would be ‘material’ requiring planning permission.
Whether the change of use of a home to an STL is material depends on a range of factors such as the impact on neighbours and the “character of a neighbourhood or area”.
His Lordship also said the application form for Edinburgh’s STL licensing scheme – parts of which were also ruled unlawful by the same judge in June – “actively discourages anyone from applying who does not have either planning permission” or an application in the pipeline.
Thousands of applications
The council’s licensing system went live in October and has so far received 3,600 applications, of which around half are for entire properties being used for holiday letting. The vast majority of change of use applications for STLs less than 10 years old have been refused by planners.
Iain Muirhead, who owns short term let accommodation and who raised the judicial review alongside property manager Louise Dickins, said: “If you’ve already applied for planning permission and you’ve been refused, it puts people in a very interesting position because they have now done so when they potentially didn’t have to do it in the first place.”
He said: “You’ve now got a category of people who have applied and been refused, shut down trading and sold their business when they potentially could have kept on going, if Edinburgh Council had interpreted things the correct way in line with The Scottish Government.”
The Association of Scotland’s Self-Caterers, which has lobbied for a re-think of STL regulation, said the judgement “not only has profound implications for Edinburgh, but short-term let policy across Scotland”.
CEO Fiona Campbell said: “For years, the industry has in good faith attempted to secure a fair, proportionate, and workable regulatory framework by engaging with local and national government.
“Regrettably, the appropriate balance wasn’t struck in Edinburgh, and we hope, in light of this judgement, that we can now work constructively and cooperatively with the council to put matters right.”
Chair of Edinburgh tenants union Living Rent Eilidh Keay said STL operators had “undermined the democratic process by seeking this judgement.”
She said: “The council must appeal this decision. As we grapple with a housing emergency, it is simply unreasonable to maintain the current level of STLs in the city and we need this number reduced, now. Edinburgh cannot continue to be a city catered only to the needs of the tourism industry and landlords, the city needs to be a home for its residents too.”
Cllr Doggart said: “Taxpayer money has been wasted on a knuckle-headed approach to fixing a problem, adding layers of complexity that were not needed. A simple licensing programme, rather than through the planning process, would have been so much more straight forward, more easily understood.
“I think now is the time for things to be stopped and a little reflection on what has happened and then think about where we go from here.”
The council’s opposition SNP group accused the Labour administration of being “asleep at the wheel again.”
SNP Councillor Simita Kumar said: “The Labour planning convenor assured the city after the last legal challenge that the problems were resolved and the policy would progress.
“This policy is crucial for Edinburgh residents to protect houses for people to live in and deal with the impact of short-term lets on Edinburgh’s communities.
“There are serious questions for the Labour-Tory-Lib Dem administration on how and when they will actually overcome these issues. They are simply wasting public money and failing to deliver an essential policy. Residents deserve so much better than this.”
Lib Dem group leader Kevin Lang said: “In his judgement, Lord Braid recognised how the meaning and effect of the legislation has been mired in confusion. So, it’s important to have got some legal clarity on how the law should be applied.
“However, it is clearly concerning that the council may not have the range of powers originally thought and which are needed to fully control the numbers of STLs across the city. Councillors and officers will have to think very carefully in terms of next steps.”
by Donald Turvill Local Democracy Reporter
The Local Democracy Reporting Service (LDRS) is a public service news agency. It is funded by the BBC, provided by the local news sector (in Edinburgh that is Reach plc (the publisher behind Edinburgh Live and The Daily Record) and used by many qualifying partners. Local Democracy Reporters cover news about top-tier local authorities and other public service organisations.
