A new independent analysis shows short-term lets make a substantial economic impact in Edinburgh while only making up a tiny percentage of the total number of properties in the city.

Edinburgh-based consultancy BiGGAR Economics calculated that the city’s short-term let sector generated £154m in GVA and supported 5,580 jobs in 2023, with guests spending more on local goods and services than the average visitor, particularly in hospitality, tourism and retail sectors.

Jointly commissioned by Justice for Scotland’s Self-Catering (JfSCC) and STL Solutions, BiGGAR’s report lays out the economic and fiscal impacts of STLs in Edinburgh, its wider sectoral impact supporting business and tourism activity, and also assesses its effect on housing supply.

The report concludes that the share of secondary lets – properties entirety rented out entirely to guests rather than owner occupied – account for just 0.8% of dwellings in Edinburgh. Moreover, the number of long-term empty properties continues to rise, including in the period after licencing was introduced, with the city remaining a hotspot for empty housing.

The study comes as The City of Edinburgh Council consults on its licensing scheme and the Scottish Parliament’s Local Government, Housing and Planning Committee will shortly take oral evidence from stakeholders on the Scottish Government’s STL implementation update report.

The key headlines include:

• The self-catering sector is estimated to generate £154m GVA and supports 5,580 jobs.
• A decrease in just 0.5% in the number of secondary let properties would have massive ramifications for the local economy, losing £57m in economic activity.
• Empty properties far exceed the number of short-term lets in the city, with secondary lets making up just 0.8% of dwellings in Edinburgh compared to 4% for empty homes. 

While it focuses on Edinburgh, the report will undoubtedly be of interest to other local authorities monitoring the impact of their short-term let regulations.

The findings have been shared with the council and the Scottish Government. The self-catering industry is committed to evidence-based policymaking, ensuring that robust and reliable data underpins public policy affecting the self-catering industry and wider tourism sector.

The industry continues to argue that the Scottish Government’s short-term let regulations have produced unintended consequences for the sector while failing to meet its underlying policy objectives, and Edinburgh’s approach in particular has been beset by three legal setbacks, most recently with the council’s u-turn on issuing three-month suspensions on licensing applications.

Graeme Blackett, director of BiGGAR Economics, said: “This independent research has found that the economic impacts of short-term lets will tend to be greater than residential use.

“This is a result of guest spending in the local economy, for example in the hospitality sector. The guest spending supports jobs in the Edinburgh economy, as well as sustaining a greater range of hospitality and other local businesses than would otherwise be the case, contributing to the quality of life for residents.

“The short-term lets sector is contributing at least £154m to the Edinburgh economy each year. Our research also found that short-term let properties account for only 1.5% of Edinburgh’s housing stock, with secondary lets at only 0.8%, too low a proportion to have a meaningful impact on the local housing market.”      

Fiona Campbell, CEO of the ASSC, said: “This major research study verifies that secondary lets are a huge economic driver for the capital, supporting over 5,500 jobs, and providing a much-needed boost to other local tourism and hospitality businesses.

“It outlines a proper holistic assessment of Edinburgh’s unique housing market, showing that secondary lets only account for 0.8% of housing stock.

“For us, the message is clear: you can’t solve a housing crisis by producing a crisis in Scottish tourism by decimating local businesses. Instead, we’ve got to build our way out and tackle the increasing problem of empty homes. We sincerely hope that this independent study can help refocus the policy agenda and inform the ongoing regulatory discussions.”

Iain Muirhead, co-founder of STL Solutions, said: “Short-term lets play a crucial role not only in supporting Edinburgh’s thriving tourism industry, which benefits all residents, but also in accommodating hundreds of visitors each year who come for economically important purposes such as work, festivals, and the education sector.

“We hope that local councillors will take this report into consideration when shaping local policies, especially planning regulations, to ensure a balanced approach is achieved. As the report indicates, overly restrictive measures could lead to the emergence of a black market, undermining the objectives of a well-regulated licensing scheme.”   

Ralph Averbuch, spokesman for JfSCC, said: “This report clearly demonstrates that full time Scottish Self-Catering operators have never been the issue. Yet we have been hounded as if killing off this vital part of Scotland’s tourism offering would be a magic cure for decades of government missteps. Politicians of all colours felt we were useful scapegoats but this economic analysis pinpoints that the problem is population growth and insufficient affordable house building.

“This problem will never be resolved by attacking a group which makes up less than 1% of Edinburgh housing. What’s needed is bold government action on housebuilding. Politicians have pretended that a crackdown on Scotland’s self-caterers is bold. It’s not. It’s been a master class in misdirection.”