Edinburgh Council ‘at odds’ with Scottish Government over STL control area, court hears

Stock photo of Air BnB key boxes on railings at Upper Bow, Edinburgh, by Lisa Ferguson.Stock photo of Air BnB key boxes on railings at Upper Bow, Edinburgh, by Lisa Ferguson.
Stock photo of Air BnB key boxes on railings at Upper Bow, Edinburgh, by Lisa Ferguson.
Another judicial review was brought by short-term lets operators in Edinburgh

A short-term let ‘control area’ introduced in Edinburgh is “unfair” and “at odds” with Scottish Government legislation, a court has heard.

Five months after parts of the council’s licensing policy to regulate holiday lets were found unlawful, another judicial review has been brought by operators – this time looking at the city’s new planning rules for those who let out whole properties on Airbnb and similar sites.

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The focus of the latest challenge is whether requirements of the city-wide ‘control area’ designed to manage high concentrations of short-term lets (STLs) apply to those who were already operating prior to its implementation on September 5 last year, or just people changing the use of their property after that date.

It is disputed the law allows for an automatic requirement for all hosts to seek planning consent as part of their licence application which is set out in council guidance.

At the hearing on Wednesday (November 8) the petitioner’s lawyer James Finlay KC argued Edinburgh City Council’s implementation of control area was “at odds” with the original Scottish Government framework.

He told the Court of Session, under the council’s interpretation continued use of properties for secondary letting – where an entire home is let out as short stay accommodation – after the introduction of the scheme would suddenly constitute a material change of use, regardless of whether the operator had been granted planning consent by the authority previously.

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He said this meant “those who might have obtained planning permission on 4th of September 2022 would need to reapply on 5th of September” however added this was an “extreme example”.

Mr Finlay KC said there was “no indication or document which gives any indication from Scottish Government for support of the city council’s view” and argued during debates on the STL control area legislation in the Parliament made it clear the intention was for rules to only apply to “future changes of use once a short-term let control area was brought into force”.

He said the “unfairness” was “clear” and the council had “acted inconsistently”.

But James Mure KC, defending the council, said permission for secondary letting given prior to the control area coming “remains extant” afterwards under the policy. He said petitioners had adopted “a very wide conception of retrospectivity” in making their argument.

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Mr Mure KC said the control area “brings the planning matter to the fore prospectively” and “would oblige an operator to seek planning permission or a certificate of lawfulness of existing use”.

He said: “It’s about use of a dwelling house for secondary short-term lets within a control area from the 5th of Sept 2022 onwards,” adding it was “not concerned with if any use before that date was not lawful”.

Judge Lord Braid commented during the hearing if the petitioners were right then the licensing scheme “may have to be revisited”. Furthermore, a ruling in the operators’ favour could spark a wave of claims against the council from hosts who have been refused planning permission for short-term letting.

Lord Braid said he would consider the case and issue his ruling at a later date. After the hearing, one of the petitioners, Edinburgh-based STL owner Iain Muirhead, said the case was for “those who have been running in good faith, trying to make sure that they at least have the opportunity to apply for a licence”.

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Mr Muirhead said since the licensing scheme went live last month there have been “almost no planning permission approvals”. He said it didn’t disagree with the principle of having a control area – commenting it was probably appropriate for the high number of holiday lets in the Old Town – but added the council hadn’t set it up “in the right way”.

Mr Muirhead, who brought the case alongside STL property manager Louise Brooks, said: “I thought it went well and our case was well made. The case highlighted the unfairness, irrationality and inconsistency in City of Edinburgh Council’s approach to STL and we hope Lord Braid will recognise this in his judgement.”

Edinburgh Council Planning Convener Cllr James Dalgleish said: “I look forward to receiving the judgement and the council will then consider any next steps.”

Cllr David Key, the SNP group’s housing spokesperson, said: “The legal process obviously has to run its course, but SNP Cllrs remain steadfast on the need for a short term let control area.

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“The new Scottish Government regulations are key to making sure we can protect our residential housing market and planning policies are a key part of how we can achieve this. We hope the Labour, Tory, Lib Dem Administration echo our support for the policy and work to offer some protection for local homes, particularly in the context of the housing emergency the council has declared last week.”

Green group housing spokesperson Cllr Susan Rae said: “Edinburgh is suffering from a housing emergency, and we know that unregulated STLs are contributing to that crisis.

“Every unregulated holiday let is one less home for Edinburgh residents. This judicial review is a desperate attempt by narrow commercial interests to try to avoid reasonable regulation, and evade the need to apply for planning permission for holiday lets. Those people across the city who are in desperate need of a genuinely affordable home in the city will be hoping that this judicial review fails.”

The Lib Dem and Conservative groups were also approached for comment.

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Fiona Campbell, CEO of short-term let trade body the Association of Scotland’s Self-Caterers (ASSC) praised the petitioners for taking the “courageous decision to bring this action” to “protect their businesses and an industry that is very important to the capital’s economy, generating around £90m per annum”.

She added: “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. Sadly, the appropriate balance has yet to be struck in Edinburgh in regard to their planning policy which is why the petitioners are engaged in this necessary legal action.”

Speaking on behalf of tenants’ union Living Rent, Ceilidh Keay said: “Short term let landlords need to stop throwing their money at expensive judicial reviews and accept that the majority of tenants and residents want tighter restrictions on short term lets.”

She said: “During Edinburgh council’s consultations, 89 per cent of respondents supported and were in favour of strong planning guidance to both regulate and reduce the number STLs in the city.

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“Edinburgh’s residents need homes. We are in the midst of a housing emergency, and we should be pulling every lever we can to help tackle this.

This includes drastically reducing the number of STLs in the city. Every flat turned into an STL is one less home for a resident in Edinburgh and every delay to STL regulations is a delay to tackling the housing crisis in this city.

“Leveraging expensive judicial mechanisms to try and overturn the council’s decision undermines the democratic processes Edinburgh’s residents have used to improve STL regulation.”