Airbnb properties are taking over Edinburgh
The number of Airbnb properties in the capital rose by 43% last year, fuelling house price inflation that makes homes unaffordable for young Edinburghers. This has to stop,
Landing a good job, falling in love and starting a family are top of most people’s checklists in life. For many young people in Edinburgh however, there’s one thing on that list which may never receive a satisfying big tick: owning a home.
Anyone looking to buy a property within Scotland’s capital is faced with the scary statistic that, according to ESPC, the average selling price has now surpassed a quarter of a million, reaching £262,897 at the end of 2018. This is a 5.9% increase on the year before, bolstered by the fact that many properties sold for more than the original home report valuation. House price rises in Edinburgh are among the highest in the UK every year.
For anyone in the selling market, it’s great news, but for those looking to finally get on the property ladder, it’s all rather disheartening. The average salary for someone working in Edinburgh is £28,000 (for young people it’s likely to be significantly less) and while most mortgage providers will lend up to 4.5 times your salary, even if you earn £28,000 this only brings us to £126,000. Other factors such as outgoings and credit card debt are taken into consideration for mortgage applications but it’s clear that for the young people of Edinburgh taking those first tentative steps on the career ladder the prospect of affording a home, particularly if they’re trying to buy alone and don’t have access to the Bank of Mum & Dad, is rather bleak.
A huge contributor to the sky rocketing prices and the ludicrous imbalance of supply and demand, is the massive increase in Airbnb properties. The online platform currently has 9,000 listings in Edinburgh – an increase of 43% in the past year. However, Inside Airbnb – an independent site which collects and analyses data publicly available on Airbnb to explore how it’s really being used in cities – suggests there are up to 12,000 listings in the capital.
The repercussions of this explosion in unregulated short-term holiday lets are numerous with local residents complaining of excessive noise and disruption in apartment blocks. Their abundance is also driving house prices up to an exorbitant level at warp speed. The already limited housing stock is being snapped up by those investing in buy-to-let properties and with many ending up as unregulated Airbnbs, what should be residential properties have now become commercial.
As first-time buyers and young families are priced out of both the
Old Town and the New Town, they look towards areas like Granton and Portobello with the knock-on effect that in the past seven years average house prices there have increased by 81% and 73% respectively. This, combined with the fact that salaries have stagnated, means the property goalposts continually move out of reach.
Finding a property either to rent or buy on a budget is a fiercely competitive venture; it’s now a delicate balancing act in which buyers try to find somewhere to comfortably live, while squirrelling away a deposit. It has become so difficult to rent affordable property in Edinburgh
that many are being asked to accept flats with the odd spot of damp, a touch of black mould or a rusty cooker. Renters are so fed up that Edinburgh’s biggest letting agent was recently picketed by exasperated tenants protesting at poor property maintenance and excessive end of lease fees.
One of the reasons why Edinburgh is so attractive for people investing in Airbnbs is the presence of the Edinburgh Festival throughout August, when the capital’s population swells to ten times its normal level. It’s big business for anyone with a spare room or flat to let – I found an entire flat available for a month, for four people, near Broughton Street at the bargain price of £41,921. But fret not, there are also options that come in at just under the £30k mark for the month.
We would do well to follow the example of Barcelona, where authorities instructed Airbnb to remove over 2,500 listings operating without a city-approved license. The platform and the city also launched a new agreement which gives officials in Barcelona access to data about listings regarding the location and the identity of the host. Holiday rentals in Barcelona must also now pay the highest rate of property tax, something that if adopted here could help fund an appropriate infrastructure, and reduce the incentive to see residential housing stock as a lucrative, failsafe investment opportunity. If nothing else, if Airbnbs remain unregulated, how are Edinburgh Council supposed to collect their proposed tourist tax?
One overlooked side-effect of the explosion in Airbnb numbers and the resultant squeeze in the number of private rentals is its chilling impact upon the most vulnerable in our society. ‘There are a lot of people renting privately who really should be in social housing, but there is such a lack of that they have no option than to rent in tenures that are often unaffordable,’ says Izzy Gaughan of Shelter Scotland. ‘More Airbnbs could lead to fewer private lets and an increase in homelessness because people just can’t afford the rents they are being asked to pay.’
Of course, we want to continue welcoming tourists who choose to visit our wonderful city but it’s time that Edinburgh Council took action to ensure that the people who call Scotland’s capital home can actually enjoy a comfortable life here.
If we need more hotels, then grant permits so that they can be built. Ordinary Edinburgh people are increasingly struggling to afford somewhere to live because we are allowing investors to buy for the purpose of short term lets – it’s time to weed out those enriching themselves by using residential properties as unlicensed hotels to the detriment of their fellow citizens.
Unless we grasp this nettle we will soon become like London, where only the very richest or professional investors can aspire to actually owning property.
What started as a great means for cheap travel and broadening horizons has become something of a monster, swallowing up cities and leaving locals to pay the price. That has to change.