From October 1, 2023, all landlords were required to apply for a licence in order to continue letting their properties. This move was aimed at reducing the number of short term rentals and enhancing the safety and compliance which brought short lets pretty much in line with properties which sit in the Private Rental Sector (PRS).
Licencing and planning rules have severely reduced the number of available short let properties. Not all short let properties are your typical short stay properties of 2-4 nights however every short let is treated the same when it comes to licencing. Many are a minimum of 21 of 28 days.
City of Edinburgh Council (CEC) made changes from 31 January 2025, which states all applicants for temporary exemption licenses would no longer be required to submit Electrical Installation Condition Reports (EICR) or Portable Appliance Testing (PAT) certificates. While the council 'encouraged' hosts to obtain these safety checks, many have opted not to when applying for these licences. A loophole has been created here for those looking to cut corners and save money on safety certificates.
At the same time, unlicenced properties continue to be advertised online through groups set up specifically for those looking to let out their property for events such as the Edinburgh Festival. Many of these properties could be unsafe or non-compliant.
The consequences for operating without a licence are now being pursued. In the first prosecution of its kind, a west Edinburgh landlord was fined £600 and ordered to pay £500 in compensation to a neighbour after being convicted of running an unlicensed short term let. Is that level of fine a strong enough deterrent, many argue it’s not.
This case has been reported to the Procurator Fiscal, which has since initiated criminal proceedings. At least a dozen more cases of unlicensed short lets are now apparently under investigation.
Operating as an unregistered landlord, or without an HMO license in the PRS, can carry fines of up to £50,000; while the maximum penalty for running an unlicensed short term let currently stands at £2,500, a disparity that I feel has to be reviewed.
Looking ahead, hosts and visitors alike face new challenges. Edinburgh’s long-anticipated Visitor Levy is due to come into effect from July 24, 2026, imposing a 5% charge on the cost of paid overnight accommodation (before VAT) for up to five nights.
Bookings made or paid for in full or in part before October 1, 2025, will be exempt. The levy is expected to impact tourists and performers during major events such as the Edinburgh International Festival 2026. Will this affect the level of bookings for short let landlords? As yet we don’t know but will keep a close eye on this change.
As an industry professional I urge short term landlords to comply fully with licensing and safety regulations to avoid costly penalties and reputational damage.