The aim of this research was to assess the impact, positive and negative, of short-term lets (STLs) in Scotland, with a focus on communities, particularly on neighbourhoods and housing. It explores the impacts of STLs from the perspective of residents, hosts, community actors, and local businesses. The Scottish Government appointed The Indigo House Group (Indigo House) to undertake this independent research. A case study approach was adopted with five areas selected to demonstrate different types of communities including urban and rural, and different experiences of STLs. In the urban context these were Edinburgh's City Centre ward including the world heritage site (Old Town, New Town and Tollcross), and Glasgow's City Centre including the central business district and residential areas close to the Scottish Exhibition Centre (Merchant City, Anderston and Yorkhill). In the rural context the areas explored were the East Neuk of Fife (excluding St Andrews) as an established coastal holiday home area, Fort William with its expanding Highland tourism centred around outdoor activities, and Eilean a' Chèo (Skye) as an established tourism area based around its landscape and island experience. The research involved a mixed method approach of secondary data analysis, short surveys of residents and hosts, and in-depth interviews involving residents, hosts, community actors and local businesses.
The amount and increase of short-term lets
According to the secondary data analysis, as of May 2019, across Scotland as a whole there were 31,884 active Airbnb listings based on analysis of Airbnb listings data provided by Inside Airbnb. The research showed that STLs have continued to increase, with a three-fold growth in Scotland between April 2016, when there were just under 10,500 Airbnb listings in Scotland, and approximately 32,000 as at May 2019.
It was also found that STLs were geographically focused, illustrated by the fact that the City of Edinburgh and Highland accounted for 50.5% of all Airbnb listings in Scotland and the top seven local authority areas accounted for 75% of all listings. At the opposite end of the scale, five local authority areas had fewer than 100 Airbnbs.
Geographic concentration was also illustrated by penetration rates of Airbnbs relative to amount of dwellings: in Scotland overall Airbnb listings were found to account for only 1.2% of dwellings, but in Skye this rose to 18.6% (the highest penetration rate by ward in Scotland), Edinburgh's City Centre ward 16.7%, Fort William 9.7%, the East Neuk of Fife 5.6%, and Glasgow City Centre was 3.2%.
The secondary data analysis also showed that the type of Airbnb listings varied considerably by area. Across Scotland as a whole, 69.2% of active Airbnb listings were for entire homes or apartments. The highest figure by local authority was in Dumfries and Galloway (83.5%) and the lowest in Midlothian (47.8%) – the only area in Scotland where private rooms were the main type of Airbnb listing. At ward levels the picture was very different with the highest proportion of entire homes in Scotland being in the East Neuk of Fife (88.8% STLs were entire properties).
The primary research undertaken confirmed the secondary data analysis, showing that in all areas, the amount of STLs had increased. Research participants were most likely to say (with the exception of some hosts) that STLs had increased significantly over the last three years in Edinburgh, Fort William and Skye. All participants saw the increase in STLs as being associated with the increase in tourism, albeit the type of tourism varied slightly by area. Increasing international tourist numbers were identified in Edinburgh, Fort William and Skye, and to a lesser extent in the East Neuk of Fife combined with its traditional Scottish and UK visitor base. There was increasing Scottish and UK event tourism in Glasgow. The experience of most participants suggested that STLs have served to extend the tourism season, and change the type of stays to short (one to three night stays) compared to the more traditional one-week self-catering offer.
Financial drivers were found to be the key reason for offering STLs. Nearly half of all host survey respondents (49%) saw STLs as a good business opportunity, and 11% also indicated that STLs were a better commercial prospect than long-term lets. Most research participants also saw the ease of entry, and lack of regulation of the STLs sector when compared to long-term residential rented housing and traditional visitor accommodation, as a key incentive to enter this market.
The extent of home sharing
When contemplating the impacts of STLs on neighbourhoods and housing it is critical to understand what type of STLs are actually being offered. The key question here is whether STLs are home shared (private rooms or shared rooms) with a resident present, home shared entire properties with a resident occasionally absent, or entire property STLs with an absentee landlord.
The secondary data analysis presented in Chapter 3, confirms that the majority of Scottish Airbnb listings are entire properties (69.2%) with most of the balance being private rooms (30.3%) and only 0.4% being shared rooms. Of the five study areas, the highest proportion of entire property lets is not surprisingly in the established holiday home area of the East Neuk of Fife (89%). This is followed by the two city areas of Edinburgh and Glasgow (79% and 78% respectively). The rural areas of Fort William and Skye show higher proportions of private rooms (33% and 38% respectively, compared to 30% for Scotland as a whole).
While this does not provide evidence on the extent to which entire properties are being removed from residential markets, the survey results from host respondents indicated that a notable proportion of the listings had previously been occupied by an owner-occupier (21%) or had been on a long-term lease in the private rented sector (15%). A higher proportion of hosts also indicated that they let out homes that were not their primary residence (62%), and a smaller proportion stated that they let out a room or their home when they lived there, or were away for short or extended periods (47%). The vast majority of hosts also indicated that they let their property or rooms for more than 90 days (81%).
Most hosts (76%) had only one Airbnb listing, but these listings accounted for less than half (45%) of the total listings in Scotland. A very small proportion of hosts (0.3% of hosts) owned, or acted as agents for a much larger proportion of total listings (13% of listings), with larger STLs portfolios ranging from 16 to over 100 properties. Four hosts with portfolios of more than 100 properties accounted approximately 8% of all listings (nearly 2,500 listings in total).
The qualitative research gave further insights based on the experience of participants. In the established holiday home area of the East Neuk of Fife, the indication from most participants was that the majority of the STLs were secondary lets rather than a room or property being shared. In both Edinburgh and Glasgow city centres, qualitative evidence supported the quantitative evidence on the profile of STLs where most are entire properties, and in Edinburgh City Centre most participants also suggested that the STLs were mainly full-time entire property lets, rather than shared private rooms or shared entire properties. Many participants in Edinburgh referred to their experience of shifts from the residential market to the STLs market, with an emphasis of business STLs in Edinburgh which was greater than found in Glasgow. In the rural areas of Fort William and Skye, again there was evidence provided by participants of properties moving from the residential sector to STLs with opinions that there were increasing shortages of housing for incoming and key workers in both these areas. The qualitative research supported the quantitative evidence that most STLs were entire properties, but also indicated the importance of shared rooms or properties appeared to be greater here than in the cities and in the East Neuk of Fife.
Taking all these quantitative and qualitative findings together, the evidence appeared to suggest a higher prevalence of secondary letting of entire-property STLs rather than sharing rooms or homes. The survey and qualitative evidence also suggested a shift of housing accommodation from the residential sector to STLs. From the qualitative interviews, this was mainly identified from the private rented and housing for sale sectors in all areas, but also with some illegal STLs lets in the social and affordable sectors in Edinburgh, Glasgow and Skye.
The impacts of short-term lets on communities
Five key impacts were found:
1. Local economic benefits
On average, each Airbnb listing generated 52 visitors per year in Scotland (Airbnb 2018). For the nation, as a whole, this equated to over 1.6 million guests in 2018. For Edinburgh's City Centre ward (population 32,000) this would equate to about 140,000 visitors per year (about 4.5 times the local resident population) and in the Eilean a' Chèo ward (Skye) (population 10,500) this would equate to around 56,000 annual visitors, or around 5.4 times the local resident population. This tied to the key positive impacts of STLs, as identified by most research participants, that tourism supports local economic benefits. These positive impacts appeared to be greatest in Edinburgh, Fort William and Skye. The benefits were related to increased spend, increased availability of jobs, often all year round, and direct jobs and trade for the STLs supply chain including property managers, cleaners and the property maintenance industry. These benefits were seen to be less significant in East Neuk of Fife due to lower visitor volume, and the direct economic impact of STLs was much less clear in inner-city Glasgow.
2. Increased household income and STLs business earnings
Apart from the prospects of potential jobs and therefore income, the potential for increased household income for STLs hosts was also identified by most research participants. Many participants made distinctions between the type of host income – whether it was 'amateur' host household income, or 'business' income. The distinction of the different type of hosts was also clear from the secondary data analysis which showed that there was a mix of amateur hosts and professional hosts/managing agents using STLs platforms. The in-depth interviews with hosts confirmed that there were a range of different types of hosts including amateur home sharers, individual small investors, and STLs businesses with varying sizes of portfolios. These differences were also reflected across the different areas as identified by many participants. Edinburgh city centre was associated with small investors and STLs businesses, and the East Neuk of Fife was associated with holiday home owners and small investors/STLs businesses. In the other three study areas, the picture was much more nuanced including a mix of hosts sharing their properties and private rooms, individual small investors letting one or two properties, and businesses running portfolios of properties, sometimes with a mix of short-term and long-term lets.
3. Reduced availability of residential housing with the negative impact on affordability, sustaining communities, and the negative impact on the wider local economy and local public services
There were indications from the survey and recurring themes from the qualitative research, from all types of participants except for some hosts, that properties were changing from long-term private lets and owner-occupation into STLs. This was voiced as a major area of concern in Edinburgh, Fort William and Skye due to the impact this was considered to be having on shortage of housing supply and affordability. In Edinburgh and the East Neuk of Fife the rise in STLs was associated with the fall in resident population and school rolls, with fears about the long term sustainability of the community. A related negative impact in the rural areas of Fort William and Skye was identified by many community and business participants on availability of labour supply and on wider local economic development due to housing shortages.
4. Negative impact on quality of life and well-being
A key negative impact related to disturbance of residents, quality of life and well-being was evident in the two cities in particular, but also some other areas depending on the property type. This related particularly to tenemental, but also other types of high-density properties with shared space and common stairs/closes. Concentrations of entire property STLs let full-time as holiday lets in common stairs often resulted in daily disruption and stress caused by constant 'visitor use', rather than residential use – noise, disturbance, buzzers, door knocking, littering, anti-social behaviour, the loss of a sense of community and security where the majority in both the close, and within the wider local community, were constantly changing strangers. The change of use also brought issues around common repairs and property maintenance although this was refuted by some hosts who considered there was more investment in STLs properties compared to other types of letting or ownership. Concerns around health and safety, and building insurance was particularly acute in these more densely built environments, but were relevant across all types of communities to protect guests, neighbouring residents and hosts.
The social and lifestyle benefits of hosting were identified by many hosts, with the positive impact this had on their general wellbeing, and work-life balance.
5. Congestion and changing communities
While the increase in tourism was associated with local economic benefits, it was also identified with bringing some disbenefits of congestion, significant demands on the local infrastructure, and changes to communities. For many participants the growth of tourism was seen to be supported by the growth in STLs. The negative congestion effects were identified in Edinburgh, Fort William and Skye where the level of tourism was the greatest amongst the five case study areas. They were also seen to be changing the nature of the communities with 39% of resident survey respondents stating that there were too many short-term lets in their neighbourhood (compared to 10% of hosts). The negative effects were associated with traffic congestion, people congestion, litter, waste, noise, lack of amenities for locals including local shops, and higher demand for and impact on local public services. This view was also associated with perceptions around lack of tax contribution from STLs.
Increasing the vibrancy and investment in local areas was identified by some resident, host and community participants in all areas as a positive impact of STLs, and spreading the benefits of tourism to areas out of the traditional tourist areas was identified by some businesses and hosts participants in Edinburgh.
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