Festival Lets: A Realistic Guide for Edinburgh Landlords

Every spring, Edinburgh landlords ask the same question: should I put my property on Airbnb for the Festival? The headline numbers look tempting. The reality is more complicated. Here's the honest version.

The opportunity, framed honestly

During the Edinburgh Festivals (Fringe, International, Book, Art, Military Tattoo) — roughly the first three weeks of August — the city's accommodation market doubles in price and empties out. A central 2-bed flat that normally lets for around £1,500 per calendar month might earn £8,000–£15,000 gross across the full festival run, depending on location, quality, and how early you list.

The lure is obvious: one month of festival work for more income than three months of a standard tenancy. But the licensing and tax regime has changed fundamentally over the last few years, and the maths is not what it was in 2018.

The licensing reality

Edinburgh's short-term let (STL) licensing scheme is mandatory. It applies to any let under 31 days, so festival lets fall squarely inside it.

Key facts:

• Mandatory since 1 October 2023 for all STL operators in Edinburgh.
• Application fees start around £550 for a small flat and rise with bedroom count and type.
• Processing times of 12 weeks or more are typical — you can't decide in June to do a festival let in August.
• Home-sharing (a room while you're living in the property) has lighter requirements than secondary letting (a separate property you don't live in).
• Secondary letting in most of Edinburgh also requires planning permission (change of use from residential to STL). The council's designated short-term let control area covers the bulk of the city, and planning approvals are not routine.

Licences last three years. If you're serious about festival lets, apply by the end of spring — not May — for August.

Tax: the FHL window has closed

This is the bit most landlords haven't caught up with. The Furnished Holiday Lettings (FHL) regime was abolished from April 2025. That removed a set of favourable tax treatments that previously made holiday lets meaningfully more tax-efficient than standard rentals, including:

• Full relief on mortgage interest (standard rentals are restricted to a 20% tax credit)
• Capital allowances on furniture and equipment
• Capital gains tax reliefs on sale (Business Asset Disposal Relief)
• Counting as earned income for pension contributions

From April 2025, a festival let is taxed like any other residential rental — mortgage interest at basic-rate credit only, no capital allowances on furniture, no CGT reliefs specific to FHLs.

That doesn't make festival lets unprofitable. It does shift the maths meaningfully against them.

The maths: a worked example

A central 2-bed flat in, say, Newington. Standard rent £1,500 per calendar month = £18,000 gross per year.

Scenario A: standard AST all year.

• Gross income: £18,000
• Letting agent fees (10%): £1,800
• Landlord registration, compliance, routine costs: £800
• Voids assumed: 2 weeks = £750
• Net before tax and mortgage: ~£14,650

Scenario B: festival let (3 weeks August) + standard let remaining 11 months.

• Festival gross: £10,000 (realistic mid-range)
• Standard let 11 months: £15,500 (after 4-week gap while you reset)
• STL licence amortised: £200/year
• Planning application amortised: £80/year (if obtained)
• Cleaning, laundry, linen, check-in/out, management fees on festival run: £2,500
• Wear and tear write-off on festival stay: £500
• Furnishing upgrades to a festival standard (amortised): £600
• Standard let agent fees: £1,550
• Voids assumed: 6 weeks total = £2,000
• Net before tax and mortgage: ~£18,070

So the festival-plus-standard model comes out about £3,400 ahead on gross, before considering (a) the tax efficiency gap since FHL abolition, (b) the considerably higher time cost of running it, and (c) the risk of planning permission being refused or revoked. Once you model those, the gap narrows further or flips.

When it makes sense, when it doesn't

Makes sense if:

• You already have an STL licence and planning permission (amortised sunk cost)
• You have flexibility to be out of the property during August yourself (making it home-letting, not secondary letting)
• You're operating at scale across several properties, where the per-property overhead is lower
• You have strong marketing and a high-quality product that commands premium rates

Doesn't make sense if:

• You don't currently have a licence and the 12-week processing time rules out this season
• Your property is in an area where STL planning permission is unlikely to be granted
• You have one property and are running the festival let yourself — the time cost is significant
• You value a simpler operating model and a single annual tax return

A quieter market within the market: festival workers

If you do have the right setup, there's a specific demand worth knowing about beyond the general visitor market. Thousands of seasonal workers arrive in Edinburgh each August for Fringe venues, bar and restaurant staffing, and venue technical roles. They need affordable, flexible 4–8 week accommodation — a segment that's often underserved by the mainstream festival-lets market, and one where a clean mid-range offering lets quickly without needing a premium nightly rate. Many Fringe venues arrange accommodation for their core team; the rest of the workforce books independently.

The bottom line

For a typical single-property Edinburgh landlord in 2026, a standard 12-month AST usually beats a festival let once you're honest about licensing costs, the lost FHL tax efficiency, and your own time. Festival lets still make sense for landlords operating at scale, with existing licences, or with very premium stock — but the "obvious win" framing no longer holds.

If you're moving back to long-term letting after a spell of short-lets, list your property free with us. For neighbourhood-level rent data to help set asking rent, see Edinburgh rent benchmarks 2026.

Not tax advice. Talk to an accountant about your specific situation, particularly if you're transitioning out of an FHL arrangement.