Councillors have refused plans for a short-term let in Birnam in an area which has a "critical" housing shortage.
The change of use application was refused by councillors in the same week neighbouring Dunkeld was named by The Sunday Times as the best place to live in Scotland.
However only days before The Sunday Times announcement councillors highlighted how trying to find a home to rent or buy in the Dunkeld and Birnam was an issue.
The picturesque villages of Dunkeld and Birnam are separated by the River Tay connected by a short hop over a historic bridge.
One local councillor told Perth and Kinross Council's Planning and Placemaking Committee the area was "overwhelmed" by holiday lets.
The committee met on Wednesday, March 22 to consider an application submitted by Alex Kettles Architects on behalf of applicants Elizabeth-Anne and Christopher Neil. Officers recommended approval of the application to change the use of the newly built flat at Merlin House from a residential home to a short-term let unit.
Strathtay Conservative councillor Ian James moved to refuse the application for the flat which no one has yet lived in as a residential home.
He said: "Dunkeld is depreciating - if you like - by its own success. Everybody wants to go to Dunkeld but they only want to go there on holiday. And the people that want to buy and live there can't because second homes are king.
He added: "Dunkeld is overwhelmed with holiday lets. To put what is essentially a business amongst residential properties - in my mind - is wrong."
Strathtay's Bailie Claire McLaren agreed and seconded.
Labour Perth City North councillor Brian Leishman supported the move and said: "It sits badly with me when we have a housing shortage that landlords see the pound signs with the chance of big profits to be made - why charge a tenant £500 a month when you can charge groups £500 a week?
"Short-term lets put profit before people's need and that isn’t right."
Bailie Mike Williamson tabled an amendment to approve the application for a temporary period of three years "subject to the council developing a policy on introducing a control zone". This was seconded by fellow SNP councillor and convener Ian Massie.
Cllr James later added: "This is a huge topic with the community council.
"Housing shortage in Dunkeld and Birnam is critical. Everything is turned over to the holiday industry so Dunkeld and Birnam is victim of its own success."
He moved for refusal "to stop the death of a small town" and highlighted a number of policies which he felt the application infringed. After lengthy discussion Cllr James moved for refusal "on the basis that as a short-term let it would have an adverse impact on the amenity of the neighbouring properties".
Councillors voted to refuse the application by eight votes to four.
