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Impact of Short-Term Lets on Communities Across Scotland

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Impact of Short-Term Lets on Communities Across Scotland Research into the impact of short-term lets on communities across Scotland PEOPLE, COMMUNITIES AND PLACES social research Research into the impact of short-term lets on communities across Scotland Scottish Government October 2019 The Indigo House Group in association with IBP Strategy and Research Anna Evans, Eddy Graham, Alasdair Rae, Douglas Robertson, Regina Serpa Contents Executive Summary .......................................................................................................... i 1. Introduction and research aims ................................................................................. 1 2. Research methodology ............................................................................................. 3 3. The incidence of short-term lets in Scotland ............................................................. 8 4. The use of short-term lets ....................................................................................... 17 5. The impact of short-term lets .................................................................................. 34 6. Conclusions and area summaries ........................................................................... 60 Appendix 1 – Data and supplementary analysis ............................................................ 74 Appendix 2 – Resident and host survey profiles ............................................................ 84 Executive Summary 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)1 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 Airbnb2. 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 1 Throughout the report ‘Skye’ has been used to refer to the Highland Council ward of Eilean a' Chèo. 2 The secondary data analysis undertaken for this research relates to Airbnb listings only. Airbnb does not constitute the entire STLs market, since some landlords do not use this platform. However, the combined qualitative and quantitative research undertaken for this study suggests that Airbnb comprises a very substantial part of the STLs market. The data used in research was sourced from Airbnb.co.uk, based on listings online as of May 2019, and provided to the research team by Inside Airbnb, and then cleaned and filtered. Full details are provided in Appendix 1. i 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%)3. A higher proportion of hosts also indicated that they let out homes that were not their primary 3 Multiple choice survey question ii 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%)4. 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
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