New data exposes Edinburgh's holiday-let planning gap as government told to close 'huge' loophole

Edinburgh politicians have renewed demands on the Scottish Government to close a loophole allowing Edinburgh holiday-lets to operate without planning permission after new analysis found 70 per cent of licenced short-term lets in the city do not have planning consent.

The data, obtained by Scottish Green councillor Chas Booth and analysed by local housing campaigners, found that 1,225 of the city’s 1,754 properties with a valid short-term let (STL) licence for secondary lettings do not have planning consent, with 800 of them having been refused permission by planning authorities.

Criticising the government and council over the figures, the Scottish Greens say the results also highlight the scale of a loophole which they claim allows landlords to dodge obtaining planning permission.

Current legislation means that those applying for a STL licence in Edinburgh must have planning permission, or be in the process of obtaining it. But campaigners say applicants are exploiting the system by withdrawing their application for planning as soon as an STL licence is granted.

The new analysis found that out of Edinburgh’s 1,754 licenced short-term lets, over 25 per cent had withdrawn a planning application.

Cllr Chas Booth said: “This analysis shows two things. First, the council isn’t doing enough to enforce the planning and licensing system, and that must improve. But more importantly, it shows the Scottish Government’s legislation is not fit for purpose.

“There is a loophole as big as a barn door that hundreds of STL owners are exploiting, and residents are paying the price. Ministers need to wake up and smell the coffee and act urgently to close it.”

Edinburgh has been a designated short-term let control area since September 2022, meaning that using an entire property that is not a principal residence qualifies as a material change of use requiring planning permission.

As of August 3, there was 1754 properties in Edinburgh with a valid STL secondary letting licence | Iconic Media

But letting experts say current planning and licencing rules are at odds with each other, with hundreds of operators successfully navigating the licensing system only to be refused during the planning process.

Fiona Campbell MBE, chief executive of the Association of Scotland's Self-Caterers, said she agreed the system was not fit for purpose, but that labelling withdrawn applications as a loophole is “wrong”.

She said: “Operators who have invested time and money following the process are caught between two sets of rules – planning and licensing – that are conflated. We have repeatedly called for this underlying uncertainty to be resolved.

“Policymakers need to devise balanced rules that serve businesses and local communities alike. We would therefore welcome the opportunity to work with Living Rent, the Scottish Greens and other parties, as well the City of Edinburgh Council, to develop a practical solution and secure Scottish Government action.

“Our sector wants to be regulated and we want the framework to work, but that takes certainty, clarity and consistency. A new Use Class Order is how we get there, with fair arrangements for established businesses and a workable route to compliance.”

Edinburgh council said it was aware of the loophole between licensing and planning, and a report on the issue was considered at a planning committee meeting last month.

Edinburgh council leader Jane Meagher said the council was seeking solutions in relation to the loophole

It is understood there are currently 329 active STL enforcement investigations, comprising of 117 investigations in relation to licenced short term lets and 212 active investigations into unlicenced short term lets.

Council Leader Jane Meagher said: “Our short term let licensing policy is helping to make sure holiday lets are safe and properly regulated. We’re aware of the issue between Licensing and Planning, and our Planning Committee has agreed to write to the Scottish Government to seek solutions.

“We’ve also taken on an additional six full-time members of staff to make sure operators have a licence in place.”

Scottish Greens MSP for Edinburgh Central, Lorna Slater, said: “These findings show that while Edinburgh is facing a housing emergency, homes are still being used as short-term lets despite planning permission being refused or applications being withdrawn.

“I welcome the work of Cllr Chas Booth and Living Rent in exposing the sheer scale of this problem. Residents here in Edinburgh deserve a system that protects their communities, and provides confidence that planning decisions will actually be enforced. These figures show that is not happening.

“I have already challenged the Scottish Government in Parliament about the loophole that allows operators to secure a licence before obtaining planning permission and these figures underline the urgency of closing it.

“Tourism is an important part of Edinburgh’s economy, but its success cannot come at the expense of people who live here, and struggling to find somewhere affordable to live.”

A Scottish Government Spokesperson said: “Under existing law, planning permission is required for any material change to use. Planning authorities can take enforcement action against breaches of planning control.

“Authorities may already refuse to consider new licencing applications if they believe there’s been a breach of planning control.

“Since 2007, the Scottish Government has delivered well over 100,000 affordable homes for social rent, including tens of thousands of new council homes.

“Scotland also continues to outperform England and Wales on affordable housebuilding per head of population.”