AirBnb owners ‘leaving the market for long-term letting’
AirBnb owners are leaving the market for long term lettings following changes to the regulations in Scotland, according to property firm DJ Alexander Ltd.
The firm said that they have been approached by holiday lettings landlords wanting to shift to long term residential letting because of costs and uncertainty over the introduction of more stringent regulations on operating through AirBnb and other short-term letting sites.
The new rules, which take effect from this month for new properties entering the market and from April 2023 for existing lets, require landlords to apply for planning permission to operate a holiday let. This permission must be sought despite there being no guarantee of acceptance so substantial fees and legal costs are incurred without any certainty that the property will be accepted.
One Glasgow landlord, who wished to remain anonymous, explained: “My feeling is that I am being forced 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 that this will be approved and no clear guidance on how to comply with the new rules. It is also unlikely that planning permission will be granted in time as architects are telling me they won’t be able to look at this until January at the earliest.”
“My advisers have said that it is 50/50 whether my property will be accepted, and, for me, the financial costs don’t justify remaining in the sector. I never made an awful lot of money out of holiday letting but I 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 be less hassle but I worry that the new regulations are going to permanently damage the holiday sector in the city and cause financial distress to those who work in tourism in Glasgow.”
David Alexander, chief executive of DJ Alexander Ltd, said: “We are seeing many landlords moving out of the holiday letting sector simply because of the uncertainty of the new regulations and the costs of implementing the rules. However, this is welcome news for the long-term residential sector which is at breaking point at the moment with demand far outstripping supply.
“Our firm recently introduced an online system for property viewing requests and in the first month it received 51,887 requests in Edinburgh where there are usually between 100-150 properties available at any given time and 27,601 requests in Glasgow where the firm usually has 40-60 properties. The largest waiting list for a two-bedroom property in Edinburgh is 788 people and the lowest is 101 and there are up to 900 groups of students on a waiting list for every property.”
He concluded: “Therefore, while the holiday market may suffer from this loss of accommodation 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 toward next April’s deadline for all holiday lets to have appropriate permission.”