New squeeze on tenants as fears grow that private landlords will seek more lucrative Airbnb-style customers, writes Beverley Brown

The private rented sector has been subjected to a great deal of legislation in recent years and with the new Scottish Private Residential Tenancy Act (SPRT) expected to be introduced at the end of 2017, the sector is going to be in turmoil once again – prompting a concern that these changes, coupled with the tapering of mortgage interest relief for landlords in the higher tax band, may fuel a move from tenants to Airbnb visitors.
Certain tenancy agreements have been excluded from the Act, including social housing tenancies and holiday lets – and student tenancies in mainstream private rented and smaller purpose-built accommodation, which under the new regime, will put paid to landlords being able to end student tenancies at the end of a 10-month academic term time as many do at present. This could result in students finding it more difficult to secure good quality accommodation in the traditional private rented sector as landlords either exit their investments or look to alternative tenant types where there will be less change in tenancy regime.
The implications of SPRT are already having an impact, according to Will Banham at Bell Ingram’s Oban office, who warns the era of the amateur landlord in the north west of Scotland is coming to an end.
He says: “Demand for good quality rental property is very strong in the local area, but with the arrival of a maze of new legislation, landlords need professional advice to navigate their way through these issues. In fact, concern over changes to the rental market is already being evidenced by an increase in holiday lettings locally, as landlords worried by the Act are instead seeking to capitalize on local tourism rather than seeking long-term tenants.”
The rise of Airbnb and other short-term let sites has been so rapid it has been accused of pushing up house prices and reducing the supply of homes to regular tenants. There is also confusion over what constitutes a private property and when it becomes a commercial undertaking. In London, homeowners are now only allowed to rent their properties for short-term cumulative periods of up to 90 days; in Paris it is 120 days and in Amsterdam, 60 days; and for Glasgow City Council, 90 days. Data shows 6,273 properties in Edinburgh were listed through Airbnb from January 2012 to July 2016 and of these, 54 per cent were for entire properties – and of those, 59 per cent were available over 90 days a year.
A council spokesperson said: “The council recognises the rise in popularity of short stay letting has implications for tourism, housing availability and the amenity of some neighbourhoods. Such letting is currently unregulated and the Council is seeking to work with the Scottish Government to consider how legislation could be changed. This could ensure that short stay accommodation let for 90 days or more is classified as a regulated commercial business.”
Stuart Montgomery, director of lettings and management at Rettie, comments: “There is a clearly a role for short-lets, which for the right property can produce strong income yield coupled with a greater level of flexibility where owners may wish to retain an element of personal use. However, it’s imperative investors obtain professional advice during this period of transition to ensure their asset is both protected and generating the best possible returns. Long-term lets are likely to continue to produce strong yields driven by the overall lack of supply and for the vast majority of properties this will continue to be the right market for investors.”