Council considers huge short-let planning clamp down
Inverness councillors propose extending holiday home restrictions across entire region as rental stock crisis deepens.
Scotland’s Highland Council is examining proposals for a region-wide control zone to limit Airbnb-style short-term lets as it grapples with a severe shortage of rental properties.
Inverness councillors Michael Gregson (main picture) and Duncan Macpherson (left) have tabled the proposal, which would require all short-term let operators in the region to obtain planning permission in addition to the existing licence requirement.
The move comes as the Council’s figures reveal 7,011 short-term let licences have been granted across the region with just four refused. However, in order to meet the housing needs of locals, 24,000 more homes will need to be built over the next 10 years.
The private long-term rental market has shrunk disastrously.”
The councillors told BBC Scotland: “The private long-term rental market has shrunk disastrously: estate agents are withdrawing from letting out properties because of the shortage of properties available.”
Official Scottish Government data confirms the country’s private rental sector has contracted from 15% of households in 2017 to 13% in 2022.
The rental sector’s decline follows controversial government interventions including rent freezes, no-eviction policies and the pending Housing (Scotland) Bill. And the process has continued, with the Scottish Association of Landlords estimating there were 22,000 fewer rental homes at the start of 2024 compared to a year earlier.
The Highland Council’s existing control zone in Badenoch and Strathspey, which was approved in December 2023, already requires planning permission for properties used as short-term lets.
The Association of Scotland’s Self-Caterers, though, describes the targeting ‘legitimate small businesses’ as showing ‘a muddled sense of priorities.’
Tried and failed
Edinburgh’s experience with similar controls shows the policy fails to keep a lid on rents while also damaging tourism. Despite a 22% reduction in self-catering rentals since 2019, rents soared 13.9% to a record high average of £1,376 in 2024 – almost twice the Scottish average (7.6%).
At the same time, according to Airbnb, hotel prices rose 11.5% and, during the 2024 Fringe Festival, guests reduced their stay length by almost 20% as reduced supply caused price increases across all accommodation.
Council officials have conceded, though, that Highland-wide status would require research and could mean additional costs for the planning department.
The councillors are therefore suggesting first asking the Scottish Government to revisit its original overprovision policy before seeking a Highland-wide control area status, with the proposals to be considered at the next council meeting.
Well, dramatically restricting short-stay let options is clearly going to do wonders for the tourist industry in the Highlands
And it won’t necessarily increase the supply of long-term rentals either. Landlords have moved into short-term lets precisely because the Scottish Government has made it so expensive, unpleasant and risky to rent our property long term. If local and national governments clamp down on short-lets as well, then it won’t be surprising if landlords simply exit the rental market entirely, even more than they are doing already.
Policy makers behave as though landlords are some sort of permanent resource, always available, always willing to accept tax increases, licensing, a hundred different rules and regulations, and a steady diet of public insults and blame for every problem ailing society. Governments seem to view private renting as not really a legitimate line of business at all, so landlords are treated differently from other forms of business, and are expected to view themselves as basically another branch of Social Services. But landlords are made, not born – they choose to be landlords, and then they can choose not to be, and invest their capital and labour elsewhere. If the Government treats them with ever-increasing harshness, landlords will just give up and walk away, tenants will be unable to find a place to live, labour mobility will decrease even further, and the Government will have made themselves a massively worse problem of homelessness and social deprivation. A thousand chickens will be coming home to roost!