Many Edinburgh property owners may be missing out on opportunities to let out their homes or spare rooms during major events, mistakenly believing that the city’s controversial short-term let rules have shut the door on this option. However, the regulations still allow temporary exemptions, enabling property owners to benefit financially during high-demand periods without needing to obtain a full licence.
Clare Wilson, Partner in the Commercial Property team at Lindsays, explains how the rules applicable to short-term letting work and what property owners need to know to take advantage of these opportunities.
Introduced two years ago in response to housing challenges across Scotland, the short-term let licensing laws require most hosts to apply for a licence to operate legally. The regulations also include planning permission requirements in Edinburgh for properties not being used as a primary residence.
However, a lesser-known clause in the rules allows for temporary exemptions from licensing, providing an opportunity for property owners to rent out their homes for limited periods. Under this clause, hosts can apply for up to three periods of exemption per year, as long as the total duration does not exceed six weeks.
This exemption is particularly useful for those who want to dip into the short-term rental market occasionally, such as during festival seasons or sporting events, without committing to a full-time letting business.
Despite these opportunities, many property owners remain unaware of the exemptions, with some wrongly assuming they are entirely barred from renting out their homes. Conversations with property and legal experts suggest that awareness of the rules and their flexibility is still relatively low, leaving some property owners missing out on potential income.
The risks of non-compliance
While the exemptions offer flexibility, it’s vital for property owners to remain compliant with the law. Operating a short-term let without the required licence or exemption is a criminal offence, carrying potential fines of up to £2,500.
Legal experts recommend that anyone considering short-term letting familiarise themselves with the regulations and exemptions to avoid falling foul of the rules. Seeking professional advice can also help clarify the best approach for individual circumstances.
Recent changes to short-term letting rules
In addition to the exemptions, recent updates to Scotland’s short-term let regulations aim to provide further support for hosts. These changes include:
- Licence transfer: Hosts can now transfer their short-term let licences to new property owners when selling their homes. This means that properties previously marketed as short-term lets can retain their licences, making the transition smoother for buyers.
- Provisional licences: Developers building properties intended for short-term letting can apply for provisional short term let licences at the construction phase, removing uncertainty about whether approval will be granted post-construction.
These updates are designed to provide greater flexibility for property owners, whether they are selling a property, planning a new build, or managing an existing short-term let.
Key takeaways for property owners
Despite the ongoing debate, the temporary exemptions provide a clear opportunity for property owners to make use of the short-term letting market during peak periods. Whether you’re considering letting out a spare room or renting your entire home while you’re away, understanding the rules is crucial to maximising your potential income while staying compliant.
If you’re unsure about the process or want to explore how the exemptions might work for you, seeking advice from a legal expert could be the best first step.
Published 3 February 2025
