Dramatic changes for the Edinburgh short-let sector
New licensing rules introduced two years ago have reshaped how landlords in the capital operate, says Karen Turner
Edinburgh’s short-let market has undergone dramatic change over the past two years, with licensing rules reshaping how landlords operate and tightening safety standards across the sector.
From October 1 2023, landlords were required to apply for a licence in order to continue letting their properties. This move was aimed at reducing the number of short term rentals and enhancing the safety and compliance which brought short lets pretty much in line with properties which sit in the Private Rental Sector (PRS).
Licensing and planning rules have severely reduced the number of available short let properties. Not all short let properties are your typical short stay properties of 2-4 nights, however every short let is treated the same when it comes to licensing. Many are a minimum of 21/28 days.
City of Edinburgh Council implemented changes from 31 January 2025, stating that all applicants for temporary exemption licenses would no longer be required to submit EICR or PAT certificates. While the council 'encouraged' hosts to obtain these safety checks, many have opted not to when applying for these licences. A loophole has been created here for those looking to cut corners and save money on safety certificates.
At the same time, unlicensed properties continue to be advertised online through groups set up specifically for those looking to let out their property for events such as the Edinburgh Festival. Many of these properties could be unsafe or non-compliant.
The consequences for operating without a licence are being pursued. The first prosecution has seen an Edinburgh landlord fined £600. Is that level of fine a strong enough deterrent? Many argue it’s not. At least a dozen more cases of unlicensed short lets are apparently under investigation.
Operating as an unregistered landlord, or without an HMO license, in the PRS can carry fines of up to £50,000; while the maximum penalty for running an unlicensed short let currently is £2,500, a disparity that I feel must be reviewed.
Looking ahead, hosts and visitors alike face new challenges. Edinburgh’s long-anticipated Visitor Levy is due to come into effect from July 24 2026, imposing a 5 per cent charge on paid overnight accommodation (before VAT) for up to five nights.
Bookings made or paid for in full or in part before October 1 2025 will be exempt. The levy is expected to impact tourists and performers during major events such as the Edinburgh Festival IN 2026. Will this affect the level of bookings for short let landlords? As yet, we don’t know but will keep a close eye on this change.
As an industry professional I urge short term landlords to comply fully with licensing and safety regulations to avoid costly penalties and reputational damage.
The moral here is simple, doo the right thing and don’t risk it to save a few hundred pounds. Make sure your property is fully compliant and licensed.
Karen Turner, Director of Lettings, Rettie