There is growing alarm that a rapid increase in Airbnb rented properties could harm residential communities in Scotland, The Ferret can reveal.
Total Airbnb listings for whole properties have almost tripled in a year, according to new analysis of short-term lets by consultancy Indigo House, produced for the Scottish Government.
Concerns have been raised by residents, community groups, conservation organisations and the hotel industry, following a rise of 184 per cent in overall Scottish Airbnb listings from January 2016 to January 2017.
They are worried about anti-social behaviour, regulation failures, housing stock and the changing nature of residential communities as short-term lets increase.
After a “dramatic” acceleration in new listings going online over the last two years, almost one in 70 privately occupied houses in Edinburgh is now listed on Airbnb, and more than one in 80 in the Highlands, with high concentrations in tourist areas from Edinburgh’s Old and New Towns to Skye and Aviemore.
Edinburgh Council said that it had written to the Scottish Government and been advised that there is a panel looking at the issue, “which will make recommendations for all local authorities in due course”.
Edinburgh Old Town resident and Grassmarket community committee member Elspeth Wills pointed out that official action was “at a snail’s pace” while Airbnb was “snowballing”.
“It’s really affecting the community and house prices, lots of people are just buying for investment and it’s mushroomed out of all control. Whole tenements in the Grassmarket are now short-term lets,” she said.
“Of course, the last thing we want to do is ban tourists. A lot of tourists enjoy being in a city where they can meet locals and they can be part of local life, and yet that is going to disappear in parts of Edinburgh. It has changed hugely in the last ten years. The way it’s going, as a remaining Old Town local, I will become just part of a wider stage set.”
Edinburgh Conservative Councillor Joanna Mowat said that there were a series of practical problems with short-term lets. These included noise, extra rubbish, parties, suitcases being dragged around, damage to common stairs, and concerns over overcrowding.
“It is often more than would be living there if it was being lived in by a family or shared amongst tenants. There are concerns about the unregulated nature of the letting so there are no fire checks on electrical equipment, fire blankets needed or smoke alarms required and checked,” she said.
“However what is probably of most concern is the feeling of insecurity that people describe when their stair is being used by people they don’t know. That sense of disconnect that is fun when on holiday seeps into one’s everyday life making home feel less secure, and it is that that is probably most damaging to those residents affected by a lot of Airbnbs or short-term lets in their area.”
Booming Airbnb
Between January 2016 and 2017, the number of properties available to rent in their entirety rose from 3,210 to 9,115 across Scotland. Hotspots include tourist destinations such as Edinburgh; the Highlands – especially Aviemore – Inverness and Skye; and the scenic coastal route of Fife.
Whole property rentals tend to be thought of as more problematic than rental of private rooms in homes because they can lead to property shortages in popular tourist areas, as well as entrepreneurs renting out multiple properties relatively free of any official enforcement of regulations.
Private room rental tends to be more positively received, as they don’t displace residents and offer tourists a more personal experience.
Over 2,800 whole properties were up for rent on Airbnb in Edinburgh alone in 2017, according to data from AirDNA, a private company specialising in data on Airbnb rentals.
Visitor surveys also indicate a rise in the popularity of the site, showing that nine per cent of visitors to Edinburgh for one night or more were using Airbnb in 2016, up from four per cent in 2014. There was an increase in Glasgow, from one per cent to five per cent.
In 2012, the Scottish Government launched Tourism Scotland 2020, a strategy with the aim of increasing visitor spend in Scotland from £4.5 billion to £5.5bn by 2020.
At the midway point of the strategy period, visitor spend was sitting at £4.8bn. Edinburgh and the Highlands have both seen increases in visitor spending of more than 30 per cent between 2010 and 2015.
In reply to concerns, an Airbnb spokesperson said: “Airbnb provides a more authentic and affordable way for guests to enjoy unique neighbourhoods in Scotland, and helps local families boost their income and afford their homes.
While visitors using Airbnb account for just five per cent of the total number of visitors to Scotland in 2016, they boosted the local economy by almost £1 million per day and helped spread benefits beyond tourist hotspots.”
The Scottish Government convened an Advisory Panel on the Collaborative Economy this April to investigate threats and opportunities that new models such as Airbnb bring to the Scottish economy, including the tourism industry. It is expected to report its conclusions this December.
The collaborative – or ‘shared’ – economy is a system in which assets or services are shared between private individuals, usually via the Internet or mobile phones.
Represented on the panel are companies such as Airbnb and Uber, as well as Nesta, PriceWaterhouseCooper, Scottish Council for Development and Industry, ScotlandIS (the trade body for the digital industry in Scotland), Scottish Trades Union Congress, lawyers Shepherd and Wedderburn, and VisitScotland.
In June the panel met to discuss the short-term rentals market and how it relates to the collaborative economy in Scotland.
Airbnb, in its submission to the panel, quoted an impact report it published in March. It claimed that “the Airbnb community generated £361 million of economic activity in Scotland last year, including an estimated £293m of guest spending and £68m earned by hosts”.
It also said that 30 per cent of guests to Scotland would not have visited the country or stayed as long without Airbnb.
The average Airbnb host age is 44, and there are 64 per cent female hosts in comparison to 36 per cent male hosts. The impact report says that some 41 per cent of hosts rely on Airbnb income to “make ends meet”.
(Data map by @danc00ks0n shows analysis of Airbnb listings derived from AirDNA data to Feb 2017 overlaid on Scottish Government’s eight fold urban/rural classification. This emphasises the concentration of listings in Edinburgh, Glasgow, Aberdeen, the Highland tourist hot spots, and along the key tourist locations around the coast in Fife.
The map is fully interactive and shows the growth in new Airbnb listings over time. Several other layers of information can be selected from the Visible Layers menu at the top right of the map.)
However, organisations such as the British Hospitality Association have repeatedly lobbied the UK Government on the impacts of sharing economy models such as Airbnb, which it argues don’t allow for a level playing field.
Short-let landlords, and particularly hosts on Airbnb and similar platforms, are not subject to the same enforcement of tax, food, health and fire safety regulation as traditional accommodation providers, such as hotel chains.
Willie MacLeod of the British Hospitality Association in Scotland argued that a principal concern was the lack of visibility of renters on the Airbnb platform.
He said: “It distorts competition, it’s invisible compared to traditional hotel accommodation and even normal self-catering offerings. Airbnb hosts are not easily identifiable.
“There are a significant number of properties listed in Edinburgh now and many provided by hosts with multiple properties – so they’re like dispersed hotels.”
MacLeod said it would be helpful if there were a new classification for this kind of use. “Local authorities are worried about their resources in terms of enforcement – but regulations should be equally applied and invisibility is no reason to ignore this,” he added.
“The platform has no responsibility. We would argue for the set up of an independent register that lists hosts. Platforms would only list registered hosts and regulatory requirements should apply to all.”
Prosecutions of Airbnb hosts over failure to observe regulations are rare. An exception was the case of Airbnb host Jean Hendy in Devon, who received a six-month suspended prison sentence for failing to comply with fire safety regulations at her property in Plymouth.
According to MacLeod, the Scottish Government and local authorities had not been doing enough to mitigate negative impacts from the rise in Airbnb’s share of the market. “But I think they are learning, and experiencing circumstances that could persuade them to act,” he said.
He also flagged up specific concerns in popular non-urban tourist areas such as the Highlands. “Businesses like ours, and other sectors too, have often rented local accommodation for staff.” With the rise of Airbnb, he said that properties for staff and seasonal workers were harder to come by.
Highland Council said that it currently has no plans to crack down on or further regulate Airbnb properties. “Currently we have no planning policy restricting holiday letting accommodation,” said a spokesperson.
“Our planning policy supports developments, especially in our rural communities, which support tourism. When the Advisory Panel publish their report we will look at their findings and follow any government recommendations with regard to new policy.”
Airbnb abroad
Many cities globally have struggled with the rise of Airbnb. In Berlin, a sharp rise in people buying multiple properties to run through Airbnb resulted in the city going from having a surplus of housing to a shortage.
A crackdown last year means that Berliners can no longer rent whole properties via Airbnb without getting Senate permission, though they can still rent rooms in houses, if they are less than half of the size of the property.
Barcelona has been the site of regular protests against the growth of tourism in the city, and destinations from Majorca to New York have been addressing the issue. Amsterdam is also experimenting with regulation to control the Airbnb market, although it has worked cooperatively with Airbnb on its regulatory model.
Adam Wilkinson, director of Edinburgh World Heritage, said that short-term lets had become a “real industry”.
While renting private rooms in houses could be positive, and allow tourists a real and authentic experience of a city, this type of rental tended to be in the minority, he said. “This is evident by the number of key safes that you see. When many properties are removed from the social infrastructure it can be a real blight.”
He argued for better coordination to handle changes in tourism. “There is not as much coordination between visitor services and planning as there needs to be be,” he said.
“How does tourism strategy lead into wider planning strategy for cities? There’s a need to consider what consequences are. The market is being allowed to lead here rather than the city being able to set objectives that benefit residents and create employment.”
He added: “There needs to be a conversation around numbers and quality. Edinburgh needs to ask what it really wants from tourism. It’s a real living place with real needs, not just a tourist attraction.”
Anti-social behaviour and the issue of party flats in Edinburgh has been raised, with Edinburgh Council reported as urging residents to embrace the phenomenon.
Airbnb has also been regularly criticised for leading to gentrification. In New York research has shown that white hosts tend to be profiting from Airbnb rentals in predominantly black neighbourhoods.
Critics also point out that that Airbnb outside the US is headquartered in Ireland, meaning it pays a lower rate of tax than it would in the UK. It’s thought, says the Indigo House report, that a high percentage of Airbnb hosts avoid paying tax on their rental income because of the difficulties of monitoring and enforcement.
In response to this issue, Airbnb told the Scottish Government’s advisory panel on the collaborative economy:
“In the context of taxation, the most relevant for home sharers is income tax – although we note that for some businesses offering accommodation on online platforms, VAT and corporation tax may be more applicable.
“In many other jurisdictions, we are also engaged in the collection of occupancy taxes on behalf of hosts, but we recognise that these do not currently exist in Scotland.”
It added that it remained the responsibility of hosts to be aware of and pay any taxes due.
The Scottish Government said that it was waiting for the outcome of the advisory panel in December to make a decision on how to respond to the rise in Airbnb accommodation, but said that a blog post by panel chair Helen Goulden of Nesta was indicative of the panel’s current thinking.
Edinburgh Council did not respond to The Ferret to confirm whether it was planning any moves to regulate platforms like Airbnb.
However, it was reported in April that Edinburgh Council was planning a crackdown on properties being rented over 9o days in a year, a move which Mowat would support.
She said: “I would like to see a licensing scheme brought in for flats that are short term lets for over 90 days a year which would allow the current festival letting to continue but where properties are being used as a business they should be licensed as such.”
The study from Indigo House urged risks to be balanced against benefits. “The options to be explored to mitigate the risks to long term housing supply, the impact on communities, and the risks to health and safety should be balanced against the positive role that short lets can play in Scotland’s tourism economy,” it said.
