AirBnb owners are exiting the long-term rental market following regulatory changes in Scotland, according to a leading property firm.
DJ Alexander Ltd, Scotland’s largest rental and property agency, says it has been approached by holiday let owners wanting to switch to long-term residential rentals due to costs and uncertainty over the introduction of stricter regulations on operations through AirBnb and other short-term agencies. term rental websites.
The new rules, which come into force from this month for new properties entering the market and from April 2023 for existing rentals, require owners to apply for planning permission to operate a holiday rental .
This permission must be sought although there is no guarantee of acceptance, so significant costs and legal fees are incurred with no certainty that the property will be accepted.
A Glasgow landlord, who wished to remain anonymous, told DJ Alexander: “I feel like I’m being squeezed out of the market by these new regulations. We are being asked to pay thousands of pounds to submit an application for planning permission when there is no guarantee it will be approved and no clear guidance on how to comply with the new rules. Planning permission is also unlikely to be granted in time as the architects tell me they won’t be able to look into this until January at the earliest.
“My advisors told me that it’s 50/50 if my property will be accepted and, for me, the financial costs do not justify staying in the sector. I’ve never made a huge amount of money from holiday letting, but enjoyed it, and the property could be used by friends and family who wanted a place to stay in the West End of Glasgow.
“Moving to the long-term market will be financially beneficial and less of a hassle, but I fear the new regulations will permanently damage the holiday industry in the city and cause financial hardship for those working in tourism in Glasgow. .”
David Alexander, Managing Director of DJ Alexander Ltd, says: “We are seeing many owners exiting the vacation rental industry simply due to the uncertainty of new regulations and the costs of implementing the rules. However, this is good news for the long-term residential sector which is currently at breaking point with demand far outstripping supply.
“Our company recently introduced an online system for property viewing requests and in the first month they received 51,887 requests in Edinburgh where there are usually between 100 and 150 properties available at any given time and 27,601 applications in Glasgow where the company usually has 40 to 60. Properties.
“The highest waiting list for a two bedroom property in Edinburgh is 788 and the lowest is 101 and there are up to 900 groups of students on a waiting list for each property.”
And Alexander concludes: “Therefore, while the holiday market may suffer from this loss of housing, the long-term rental market welcomes this much needed addition of housing stock to what is already a market with a severe shortage. of properties. I think this trend will accelerate as we head towards the next April deadline for all vacation rentals to have proper clearance.
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