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Is Airbnb contributing to housing problems in Scotland?

How does Airbnb affect the housing market?

We believe that people being able to use properties for short lets is contributing to a dearth of properties coming onto the market. Many people who would previously have sold a property are now holding onto it, and taking advantage of the short-term letting market. We’re not making a judgment on this, we’re just addressing the fact that it is adding more pressure to the shortage of properties across Scotland.

What it means for local neighbourhoods?

When a property comes onto the market currently, demand is greater than supply. Which means that properties can sell for far higher than the home report valuation. As a seller, that’s great news. But, for the rest of the area, it can cause affordability issues that can change the very make-up of an area. Those who live there can be priced out of the area, leading to social problems.

Put simply, these properties would otherwise have been available for long-term rent or to buy. And, as they’re not, it has a knock-on effect on the market.

Regulation issues

How should these short-term lets be regulated? At the moment, they don’t fall under the auspices of the license for Houses of Multiple Occupancy (HMO). As a requirement of the HMO license, a landlord must send the council an updated gas safety certificate every year, install and maintain smoke alarms and provide safety certificates for all electrical appliances. On Airbnb lets, this doesn’t happen. Which critics say means that people are at risk when they use an Airbnb let. Often a householder’s insurance policy doesn’t cover the renters or the damage caused by them.

Should we be worried?

Policies like the cut in tax relief on mortgage interest for buy-to-let properties and new rules governing privately rented properties may make a holiday lets model even more attractive. Airbnb’s own data shows that the number of guests staying in Edinburgh, Glasgow and Aberdeen rose by an average of 144 per cent, year-on-year. Edinburgh currently has 4,700 properties listed with Airbnb. In Glasgow, the figure is 1,300 properties. The removal of this number of properties from the market can’t be absorbed without having a fairly major impact on the supply and cost of housing. It’s a problem that’s being monitored by many across Scotland, including charities who are concerned with homelessness. 

Alison Watson, deputy director of Shelter Scotland, said: “Our concern would be if people were being displaced due to the lack of affordable housing caused by fewer homes or rooms for rent becoming available.”

Other factors that affect the housing market

Population increase has had a major impact on housing demand, and will continue to do so. In 1951 the population of Scotland was 5.1 million. By 2016 it had risen to 5.4 million. The population is predicted to grow to 5.7 million by 2039. And all those people need somewhere to live. The family unit is no longer what it once was; resulting in more one-person households.

There’s also a chronic lack of lack of housing stock across Scotland. In 1970, 43,126 new houses were built in Scotland, including the private and public sectors. In 2016, just 16,498 homes were built – less than half the number in 1970. And fewer social housing developments are being built, meaning certain sectors of the market are even less-well served.

Other issues raised by Airbnb lets

People in flats in areas with high Airbnb penetration often have concerns about the security of their property. They cite a high number of unknown people in their stairwell and have concerns about late night anti-social behaviour.

There’s also a concern that in tourist areas there’s a need to balance the demand for accommodation with the expectation that some local people will still be living in the area. If tourists visit an area and find a lack of a vibrant community they may not come back. The epitome of this problem is the city of Venice – where locals find accommodation harder and harder to find and afford.

It’s not all bad news

There’s no doubt that Airbnb has created a marketplace where, generally, budget-minded tourists can experience a host city, while living like a local. These visitors live in the city, spend money in the city and add to the city’s vibrant cultural mix.

A final word

But these positives have to weighed against the negatives that are adding to the already significant problem of their not being enough properties on the market to satisfy demand. Which will drive prices up and further exacerbate the problem. If Airbnb want to belong anywhere, we need to make sure everywhere can manage housing supply and their market model.

 

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