A crackdown on holiday lets in Edinburgh has been deemed “unlawful”.
Holiday let owners and landlords took the Labour-run city council to court last month over its proposed licensing scheme for short-term lets.
The Scottish Government, under Nicola Sturgeon’s leadership, handed councils the power to introduce such schemes as well as control zones.
The council has argued that a high number of short-term lets have fuelled housing shortages and anti-social behaviour.
But a decision by the Court of Session has now ruled parts of the scheme relating to tenement flats were “unlawful”, less than four months before it was due to take effect.
Those who petitioned against the scheme heralded the decision as a “victory for law and common sense”.
Short-term let hosts had until October 1 to apply for a licence, while those listing whole properties on platforms such as Airbnb also needed to apply for planning permission.
Petitioners against the plans raised £300,000 through crowdfunding for a judicial review, which was described as the largest amount raised for a case in the UK.
The city council will now have to revise its proposals.
Following a two-day hearing, Lord Braid ruled that a presumption against granting licences for secondary lets – an entire property that is not an operator’s main home – within tenement blocks was unlawful.
He found that the lack of provision for temporary licences and requirements for some hosts to provide floor coverings to dampen noise went beyond the council’s power.
He wrote: “It is not the function of the respondent’s licensing authority to decide that a licence should not be granted because a property is of a particular type or is in a particular area.
“For the respondent to adopt a normal practice of not granting an short-term licence for premises in a tenement, even where planning permission had been granted, is irrational and contrary to the purposes of the overall statutory scheme.
“It would be perverse and oppressive for the respondent, upon receipt of a licensing application, to require an applicant to obtain planning permission for a tenement property; and thereafter, planning permission having been obtained, to refuse the licence for no other reason than that the property was in a tenement.”
Responding to the ruling, petitioners said it should signal a “fresh approach” to short-term lets licensing from the council and the Scottish Government.
Andy Fenner, chief executive of the Short Term Accommodation Association, said: “This decision is further proof that local and national governments across the UK are rushing blindly into plans to regulate the short term rental industry, risking unintended consequences that will seriously damage local economies and the hundreds of thousands of people who rely on the short term rental industry for their livelihoods.”
Living Rent Edinburgh, a tenants’ union, said: “A small group of people with money and power have weaponised the legal system to hold an entire city to ransom.
“Edinburgh needs homes not holiday lets. We haven’t got their money, but we have strength in our numbers.”
The scheme was put in place after a consultation with 5,600 respondents which showed 88pc were in favour of the restrictions.
It comes as Michael Gove plans to implement separate planning permission rules for holiday let owners in England.
Council leader Cammy Day said he made “absolutely no apology for seeking to protect our residents” despite the ruling.
He added: “It is no secret that we face unique housing pressures here in Edinburgh, with a small but densely populated city centre and fast growing population, and it’s crucial for us to strike the right balance between promoting our visitor economy while looking after the people that live here all year round,” he said.