Edinburgh faces Short Term Lets collapse with fewer than 80 entire properties so far licensed
Edinburgh faces Short Term Lets collapse with fewer than 80 entire properties so far licensed
Plus school strikes, tram inquiry fall-out and National Galleries opening
Edinburgh faces collapse in self-catering accommodation as deadline looms
Edinburgh is facing the virtual destruction of its self-catering accommodation sector as the countdown to the introduction of the controversial new licensing scheme hits in just five working days.
With a deadline on Sunday, the numbers show a massive collapse in so called Airbnb style short-term lets available in the city.
As of the end of last week, there had been 365 applications for a licence, of which a little over 200 have been granted so far, with the others either awaiting decision or withdrawn. Fewer than 80 of those granted have been “secondary lets”, or entire properties. Most other approvals are made up of spare room type lets.
That may pose an enormous issue not only for the city’s vital tourism industry, but also for the city’s world-renowned Festivals who need the flexible accommodation for performers and crew, and for major employers, such as the universities and the NHS, both of which regularly use short-term lets to accommodate new staff settling in the city.
A recent report for the city council indicated a local authority expectation of an 80% reduction in short-term lets, which was described by council leader Cammy Day subsequently as a “worst case” scenario. However, applications are on track to deliver a significantly higher attrition rate. Anyone operating a short-term let without a licence from 1 October will be committing a criminal offence, with fines of up to £2,500.
UNINTENDED CONSEQUENCES
The tourist industry has been warning of the “unintended consequences” of the application of the scheme, particularly in the Capital, and the potentially calamitous impact on the economy and jobs. Tourism supports 31,000 jobs in the city.
Indeed a plea to First Minister Humza Yousaf for a halt to the new scheme, introduced under Scottish Government legislation, while a range of legal issues are examined, was rebuffed. The Association of Scotland’s Self Caterers (ASSC) had written to him, backed by 37 MSPs from all parties. Others, including the Scottish Tourism Alliance and the Scottish Bed and Breakfast Association, have also called for a halt while potentially disastrous unintended consequences for the Scottish tourism sector are examined. His reaction, the ASSC says, show that he is “falling at the first hurdle” in delivering his New Deal for Business.
Both the city council and Scottish Government have previously quoted Inside Airbnb data to back the need for greater regulation and licensing and have used the figure of up to 12,000 Airbnb listings in the city. Inside Airbnb estimates nightly income of £182 per night generated by each listing. It is unclear what research has been carried out into the wider potential economic implications, such as how a significant reduction in self-catering availability will impact the city’s economy. One report to the planning committee compared short-term let to residential properties. It maintained residential properties produced a higher Gross Value Added figure, while short-term lets created more employment and yielded more taxation to fund services.
SCALE OF PROBLEM
The scale of Edinburgh’s Short-Term Letting has been a subject of intense discussion. The Scottish Government pre-legislation research used data from Inside Airbnb, a website which scrapes data from the web and transforms it into usable information. Airbnb disputes the accuracy of what Inside Airbnb produces. As of the weekend, Inside Airbnb identified 7,698 listings in the city. However, using the website’s filters to use only recent listings, and those likely to be operating as secondary let businesses, that drops to 1,878.
The Government and Council maintain the new scheme is necessary to regulate the sector, to tackle the housing crisis in Edinburgh, with many properties being used as holiday accommodation rather than homes, and also to cut down anti-social behaviour they claim is associated with some short-term lets. The sector has supported licensing to weed out poor operators but believes the scheme is “hugely disproportionate” and designed to drive many out of business.
Short-term let operators need to obtain or have applied for a licence by 1 October or cease trading. They must satisfy planning and licensing requirements which they claim are onerous and expensive causing many operators to simply give up, leaving Edinburgh shorn of an important element of its accommodation offering.
Properties where ten years of continuous use as short-term lets can be proven will enjoy “grandfathering rights” and automatically gain a “certificate of lawfulness”. Those with less than ten years of operation need to apply for planning consent. Non-refundable fees and other costs can run to thousands of pounds, with the chances of success running at less than 2% in Edinburgh.
DISINGENUOUS CLAIMS
Planning is the first hurdle to overcome, and of the 252 applications currently on the planning list, only three have been granted, with 84 remaining to be decided. The vast majority of those decided to date have been refused, with some others withdrawn. Claims by Scottish Government that no licensing applications have been rejected to date appear disingenuous, since the new process introduced by the legislation demands planning as the first step.
Greater complication may follow soon. The Inquirer can confirm the city council will defend its planning policy on short-term let licensing at a Judicial Review scheduled to be heard at the Court of Session on 8 November – less than six weeks after the 1 October deadline for licence applications.
An earlier Judicial Review into the city council’s licensing policy found that significant parts were “unlawful,” forcing a number of changes. The November Judicial Review will focus on the retrospective aspects of the planning policy. The petitioners will argue that this operates against all previous understanding of planning law.
Much will focus on the interpretation of the words “meaningful change of use” as they relate to properties which have a history of operating as short-term lets, but do not yet possess planning permission. Iain Muirhead, the petitioner, believes that the retrospective nature of what is being proposed flies in the face of planning law’s normal practice.
Some last-gasp changes do appear possible, following an intervention by the licensing scheme’s architect, former Greens MSP Andy Wightman, who said it had never been the intention of legislation that homeowners who engage in house swapping or house sitting would be caught up in it.
Deputy First Minister Shona Robison hinted in the Scottish Parliament that they may be making it clearer that house swaps and house sitting do not form part of the scheme following concerns that they do.
YOUR EDINBURGH BRIEFING
SCHOOL STRIKES: Strikes are set to close schools across the Capital from tomorrow after last-ditch talks failed to find a breakthrough over the weekend. Janitors, cleaners and other non-teaching staff will walk out for three consecutive days in a dispute over pay. All local authority schools and nurseries are expected to close as a result of action by members of Unison which represents many of the city’s lowest paid public sector workers, with teachers delivering lessons online. Mark Ferguson, Unison Scotland’s chairman of local government, said only “something really significant” could avert the strikes. He told the BBC: “Our members feel very strongly that the under investment in local government, they are having to pick up the pieces of that and what they don’t want is our communities suffering any further.”
MELVILLE MEA CULPA: A descendant of Lord Melville has defended removing the plaque describing the 18th century politician’s role in delaying the abolition of slavery from his ancestor’s monument in St Andrew Square. The removal of the plaque - which states Melville was “instrumental” in a delay which resulted in the death of half a million enslaved Africans - has been reported to Police Scotland as a potential crime by Green city councillor Claire Miller. The Melville Monument Committee, which includes descendants of the politician, described the plaque as “cartoonishly inaccurate”. Viscount Melville told The Herald: “We had all the necessary permits, and ensured that the owners of St Andrew Square, who have ultimate authority, had no objection. We acted completely within the law.”
OYSTER COMEBACK: Native oysters have returned to the Firth of Forth for the first time in 100 years as part of a project designed to boost overall marine life in the waters. Restoration Forth aims to create a reef supporting 30,000 oysters which are being exported, following careful biosecurity protocols, from Little Loch Broom, near Ullapool. The oysters naturally filter the water and help create an environment that supports fish, crabs, sea snails and marine plant life.
CLEANER BUSES: Edinburgh and its environs will soon reap the benefits of seeing 50 new Volvo BZL Electric double deck buses on the streets of the Capital. At an investment of over £24m, Lothian will introduce these new vehicles in two batches across 2024, with the first vehicles appearing in the Spring. This investment cements the company’s commitment to reduce emissions and improve air quality in its operating environment.
FILMHOUSE STARS: Actor Timothy Spall and director Mike Leigh are the latest star names to back the fundraising campaign to reopen the Edinburgh Filmhouse in its former home on Lothian Road. The Open the Doors appeal is now more than a quarter of the way towards its initial £250,000 target with 45 days to go.
LUXURY HOSTEL: An office off St Andrew Square would be converted into what is being billed as a ‘luxury hostel’, with a rooftop restaurant, under plans submitted to the city council. Developers TAKRA Edinburgh Ltd say the 237-bed hostel and 100-cover restaurant on the upper floors at 11-13 South St Andrew Square would appeal to an older age group than that normally associated with hostels.
PASSIVHAUS SCHOOL: A new school building to replace the Wester Hailes Education Centre - ‘the Whec’ - will be built to exacting Passivhaus standards for ultra-low energy use. The Passivhaus movement started in the 1990s in Germany and Scandinavia, building homes designed to be draught-free and heavily insulated, in order to maintain an almost constant temperature throughout. Growing in popularity, the method has since been applied to everything from a fire station to a Tesco supermarket. The new four-storey, 800-pupil Wester Hailes High School building will also feature a direct link to the banks of the Union Canal, an allotment and orchard, and an outdoor gym.
BARNTON BISTRO: Plans to turn the former Bank of Scotland building at 564 Queensferry Road into The Barnton Bistro have been submitted to the city council. If approved, the two-storey former bank branch will reopen as an 80-seat bistro after lying empty for more than a year.
RESIDENTS’ REWARDS: A new campaign has been launched to encourage residents and visitors to ‘experience the beauty’ of Edinburgh following the summer festival season. The new Forever Edinburgh initiative will promote local businesses and highlight unique experiences in the Capital, such as boat trips on the Forth. As well as a new city destination website, a ‘UK first’ ChatGPT chat box and neighbourhood maps, the campaign include a series of unique resident-only offers such as year-round discounts.
IN FASHION: Independent menswear boutique Aubin has opened its first standalone store outside London at 47B George Street. Widely stocked in John Lewis, the former sister brand of Jack Wills is known for “fleece gilets, sturdy parkas and day shirts embroidered with the fox in a top hat logo” at its existing store in Soho.
THE BUSINESS
TRAM INQUIRY: The city council’s head of legal services is coming under pressure following criticism in Lord Hardie’s tram inquiry report, writes Kenny Kemp.
The dissection of the inquiry report, which was released last week, into Edinburgh Trams’ massive over-spend will go on for some time, but one key aspect relates to legal officer Nick Smith’s written submission to our elected members.
His actions are now coming under increasing scrutiny with Lothian MSP Miles Briggs today calling for those who made expensive mistakes to explain themselves.
Smith’s submission came at a critical time. On 24 June 2010, David Anderson, Director of City Development, and a non-executive director of Tie, and Donald McGougan, director of finance, and both responsible directors, provided councillors with an update on the project, including the explanation of contractual difficulties with the consortium.
‘FINELY BALANCED’ COMMENT: The outcome of those investigations was that Nick Smith, the senior legal figure within the council, sent an email to Mr McGougan and Mr Anderson, stating that he had agreed “a few comments from Richard” Jeffrey, the then chief executive of Tie.
It proved to be an email which could have been misconstrued by Edinburgh councillors. It tended to support the impression that the phrase “finely balanced” emanated from Mr Jeffrey. However, tracked changes showed that Mr Smith had added that sentence. Lord Hardie was clear that inserting an inaccurate statement into a report that he knew was intended for councillors who were entitled to rely upon the accuracy of information provided to them by officials. The second was that there was no discussion or challenge of the sentence despite the fact that the draft report was subject to review by a number of individuals from CEC, tie and DLA [the law firm involved].
He said this was an astonishing position to adopt. In this case Mr Smith, a qualified solicitor, not only introduced the inaccurate sentence but reassured the responsible directors that the paragraph containing that sentence was correct. The failure of others to notice and correct the relevant sentence cannot, and does not, excuse Mr Smith’s actions.
Mr Smith joined Tram project team in February 2007. He was Principal Solicitor (March 2010–September 2011), Depute Head of Legal and Administrative Services (September 2011–July 2012), Chief Procurement Officer (August 2012-February 2016) and is Head of Legal Services and Risk and Monitoring Officer (February 2016-present date).
The email was just one of a catalogue of mistakes, errors and a lack of robust challenge made during the tram building, which cumulatively have cost the taxpayers of Edinburgh millions of pounds.
Hardie’s report says there is an obligation of all council officials not to mislead councillors. Furthermore, the interpretation of legal decisions made by council officials, including senior officials who are not legally qualified, might be expected to rely upon the views expressed by qualified solicitors within CEC.
DOUBLING OF COSTS: The original budget for the trams was £545m, while the best estimate for the total cost of the first phase to York Place is £835.7m. A business case was submitted to the council in 2019 in support of the extension from York Place to Newhaven. The total expenditure on the originally envisaged line will now exceed £1,043m – almost double the original estimated cost.
TIE’S RESISTANCE TO CRITICISM: When the whole fiasco reached its expensive crescendo, an adjudication process was undertaken between Tie (Transport Initiatives Edinburgh) Limited and BSC. CAF, Construcciones y Auxiliar de Ferrocarriles, the Spanish supplier of the tram vehicles, joined the consortium with Siemens and Bilfinger Berger (UK) (BBS) and following the signature of the Infraco contract on 14 May 2008, the consortium included CAF and became known as BSC.
“The culture within Tie’s senior management prior to the signature of the Infraco contract was one of resentment of any challenge to, or perceived interference in, their role of procuring and managing the project,” said Lord Hardie.
This is best illustrated by Tie’s attitude to the involvement of senior CEC (City of Edinburgh) officials from the solicitor’s department and the departments of finance and city development responsible for scrutinising the project, looking after the council’s interests and reporting to their respective managers. This group was known as “the B team” and during meetings with Tie asked appropriate but searching questions. Yet Tie would complain to the appropriate director within the council about what it interpreted as interference in its procurement of the project.
The wholescale resistance to any criticism by Tie became a theme which prevented proper examination.
“Senior CEC officials did not subject the FBC [final business case] to the level of independent scrutiny advocated by the “B team”, and they provided councillors with reports that were inaccurate in material respects. These inaccuracies arose because of officials’ reliance upon the Chief Executive’s “one family” approach, and their uncritical acceptance of TIE’s classification of the Infraco contract as being substantially a fixed-price one.”
Lord Hardie points out that a statement in the report on the adjudication that the outcome was “finely balanced” in terms of legal principles was inaccurate.
APPLE MANIA: What a manic weekend for the Apple Store on Princes Street - and for the company around the world. Even at 11am yesterday, the queues were round the corner for one of the four new iPhone 15s. The city store had been part of the massive pre-ordering campaign and was well-prepared for the rush. The iPhone 15 starts at £799, with the iPhone 15 Plus, the iPhone 15 Pro and the iPhone 15 ProMax at an eyewatering £1,599. One special feature is the USB-C port which means it does not need a proprietary iPhone cable. Most versions were sold out – and the store expects new stock. Inquirer heard that a number of these new phones had been grabbed by thieves from the Edinburgh store, but were rendered useless by the digital security measures. Still, beware of anyone trying to sell you a new device.
DESIGNS FOR THE TRON: Once upon a time, Edinburgh would be far quieter with visitors as October and autumnal winds approached. Yet there are still plenty of tourists taking in the sights – and spending money on gifts and mementoes. The Scottish Design Exchange, with its shop at 117-119 George Street and, since July last year, in The Tron church have dozens of high-quality stalls selling exquisitely designed products by artists living in Scotland. The social enterprise, run by CEO Lynzi Leroy, has been a great success story. The Tron, leased to the Scottish Historic Buildings Trust, on a long-term loan from the City of Edinburgh Council, is currently looking at the feasibility of the area, including what to do with the old Hunter Square toilets. One of the traders commented that the whole area is thronged with tourists but there has been very little police presence – and there has been an increase in anti-social behaviour. Perhaps this is part of the character of the Old High Street, but plans for this important part of the town are eagerly awaited.
LEISURE VENUE ON MARKET: Bids of up to £70m are expected for the Omni Centre, the hotel, cinema, bars and restaurants complex at Picardy Place, which is now up for sale. Daily Business reported the popular city centre venue has been put up for sale for £65m by owner Nuveen. The 219,727 sq ft complex includes a 12-screen Vue cinema and the 77-bedroom Glasshouse boutique hotel.
It is also home to a Nuffield Health club and has a 990-bay Q-Park car park in the basement and a one-acre garden roof terrace above the hotel. The Omni Centre generates an annual net income of £5.56m, with the asking price representing an 8% net initial yield. The selling agents are JLL and Culverwell. The Omni Centre was last sold for £74.8m in January 2017 and sold for £107.35m in May 2006.
THAT’S ENTERTAINMENT
NATIONAL GALLERIES: A suite of new galleries opens at the National Galleries of Scotland on the Mound on Saturday after a £38.6million project to create a spectacular new exhibition space. The new galleries will display works by some of Scotland’s most celebrated artists including Phoebe Anna Traquair, the Glasgow Boys and Charles Rennie Mackintosh, bringing works from 1800 to 1945 together for the first time as a single collection.
DINERS BEWARE: Interactive Theatre International are putting on a unique dining experience for brave diners in Edinburgh this autumn, with residency for Faulty Towers the Dining Experience at the Apex Grassmarket Hotel. Audiences “enjoy a 3-course meal and 5-star comedy”. From 28 September – 8 October at the Apex Grassmarket Hotel, 31-35 Grassmarket, Edinburgh. Tickets are now on sale via www.faultytowersdining.com
HAUNTED HOUSES: Direct from London’s West End, 2:22 A Ghost Story has been described as a ‘cracking supernatural thriller; that will have you on the edge of your seat. Written by Danny Robins, it won Best New Play at the Whatsonstage Awards. Prepared to be spooked from Tuesday 26 September until Saturday 30 September at the Festival Theatre. Then, also at the Festival Theatre, there are more supernatural tales with Sister Act: A Divine Musical Comedy, with comic Alan Stewart in the lead role. Monday - Saturday, 2-7 October.
QUICK BITES
SPICY SUCCESS: An Edinburgh restaurant has scored a double hat-trick of awards. Ignite, in Morrison Street, which specialises in Indian and Bengali food, was selected as Best Asian Restaurant, Edinburgh in the Scottish Asian Restaurant Awards held at the Sheraton Grand Hotel. The awards, organised by the Asian Catering Federation, in association with Just Eat, are in their seventh year and supporters include Cobra Beer. The restaurant is now a three-time winner, having won the same award in 2020 and 2021. In May, Ignite was also named ‘Indian Restaurant of the Year’ in the Scotland Prestige Awards 2023/2024 and also attracted an award from LUXlife magazine, which named Ignite ‘Best Indian & Bengali Restaurant 2023 – Edinburgh’ in its 2023 Restaurant and Bar Awards.
SEOUL FOOD: Korean food continues to tickle Edinburgh’s tastebuds, and Bibimbap – which has enjoyed five successful years in Glasgow – has opened its first Capital venue in Hanover Street with a ‘grab and go’ style dining experience with space for up to 30 customers with a menu inspired by popular street food dishes of Seoul with highlights including corn dogs, beef udon and jeyuk bokkeum (spicy pork) available to sit in or takeaway.
SOME EXTRA DIARY DATES FOR YOU
The Scottish Mental Health Art Festival begins on Wednesday, 4 October, and runs until 22 October. The theme is Revolution as a statement of social change. Edinburgh events include canalside walks with sketching, an exhibition at Whitespace Gallery from artists Luke Cockayne, Carys Reilly and Chandelle Waugh, the Easy Sunday sessions at the Scottish Storytelling Centre, and Crafting for Companionship, at Inch Park Community Sport Club.
Scotland’s next game in the Men’s Rugby World Cup is against Romania on Saturday at 8pm. After beating Tonga 45-17, the Scots need a big victory before taking on Ireland in the group decider.