Cllr Neil Ross Regulatory Convener said: “We had always committed to reviewing the licensing scheme after it had been operating for a year and we did that last summer.
“We made some improvements to our policy at the beginning of year, following feedback from residents and the industry, and this is the final change agreed at Committee. The intention is to make our scheme as fair and reasonable as we can for residents, visitors and operators.
“I will also be writing to the Scottish Government’s Minister of Housing to ask for greater clarity on short term let licensing condition MC13 (planning permission), which some residents and short term let operators find confusing, and to see how this might be addressed.”
The Association of Scotland’s Self-Caterers (ASSC) is calling for urgent action to rectify yet another blunder afflicting Scotland’s tourism industry, this time stemming from a deeply flawed implementation of the new Non-Domestic Rates (NDR) process for self-catering holiday accommodation.
The ASSC has been made aware of thousands of self-catering operators being unjustly removed from NDR – and in some cases taken to Tribunal for allegedly failing to provide evidence of the 70 nights’ occupancy rule for the 2023–24 period.
Critically, operators failed to receive formal requests for evidence from Scottish Assessors which were sent out by untracked mail, despite easily being able to evidence the required occupancy. This is once again penalising legitimate small businesses – who do so much to boost local economies across Scotland – and was clearly not the policy intention.
Many long-standing and compliant businesses have not only been unlawfully removed from the valuation roll and commercial water and waste provision, but also hit with double council tax bills and are facing severe emotional and financial distress – all without ever receiving the legally required Assessor correspondence.
Recent ASSC survey work highlighted 63% of operators never received the formal evidence request letters; 95% of delisted businesses were able to prove compliance with letting requirements; and 81% have been billed for second home council tax, some facing eyewatering charges of up to £120,000.
To compound matters, in a response to a recent parliamentary question from Alexander Stewart MSP, Cabinet Secretary Shona Robison suggested that operators could benefit from relief schemes – however, this completely misses the point: if a business has been removed from the NDR system altogether, it cannot access any such support. This fundamental misunderstanding highlights just how disconnected the Scottish Government is from the realities facing the self-catering sector.
Recent figures from the Scottish Government [1] showed an anomaly in the number of properties removed from the valuation roll in 2023–2024 — more than double any previous year, with 3,810 removals compared to 1,540 in 2022–2023.
This latest development comes in the wake of the ongoing STL licensing and planning shambles, which has squeezed the supply of available accommodation while pushing up costs – especially in Edinburgh, the most expensive major city break destination in western Europe according to a recent Post Office Travel Money analysis.
The industry is now increasingly alarmed by the current impasse on the treatment of self-catering accommodation within the NDR framework despite pleas to relevant stakeholders. While Assessors assert that they are merely applying existing legislation and cannot act without further instruction or legislative change, Scottish Ministers maintain that Assessors are independent and therefore beyond intervention.
The self-catering sector therefore finds itself in a troubling Catch-22 scenario which it hopes can be resolved through urgent and pragmatic leadership to ensure self-catering operators receive the fair treatment they deserve.
Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, commented: “This policy was introduced to remove economically inactive second homes from benefiting from NDR relief, which we support.
“It was never meant to target legitimate small businesses. The system has failed and it is now punishing the very operators who support our tourism economy and rural communities. We urge the Scottish Government and Assessors to act swiftly and lawfully to correct this injustice.
“As we approach the busy summer season, the last thing the Scottish self-catering needs is yet another debacle hitting our sector, hot on the heels of the accumulated regulatory burden from short-term let licensing and planning regulations, and before local tourist taxes are imposed.
“This relentless uncertainty is not only damaging livelihoods – it is placing a significant strain on the mental health and wellbeing of small business owners who are already under immense pressure.
“Operators want to get back to what they do best but can’t do this with both hands tied behind their back. We need urgent leadership to restore consistency, fairness, and confidence in the system before it is too late.”
Warning from the self-catering sector that a punishing regulatory framework will simply cost jobs and do nothing to resolve Edinburgh’s housing crisis
A new independent analysis shows short-term lets make a substantial economic impact in Edinburgh while only making up a tiny percentage of the total number of properties in the city.
BiGGAR Economics, a respected Edinburgh-based consultancy, calculated that the city’s short-term let sector generated £154m in GVA and supported 5,580 jobs in 2023, with guests spending more on local goods and services than the average visitor, particularly in hospitality, tourism and retail sectors.
Jointly commissioned by Justice for Scotland’s Self-Catering and STL Solutions, BiGGAR’s report lays out the economic and fiscal impacts of STLs in Edinburgh, its wider sectoral impact supporting business and tourism activity, and also assesses its effect on housing supply.
The report concludes that the share of secondary lets – properties entirety rented out entirely to guests rather than owner occupied – account for just 0.8% of dwellings in Edinburgh. Moreover, the number of long-term empty properties continues to rise, including in the period after licencing was introduced, with the city remaining a hotspot for empty housing.
The study comes as Edinburgh Council consult on their licensing scheme and the Scottish Parliament’s Local Government, Housing and Planning Committee will shortly take oral evidence from stakeholders on the Scottish Government’s STL implementation update report.
The key headlines include:
The self-catering sector is estimated to generate £154m GVA and supports 5,580 jobs.
A decrease in just 0.5% in the number of secondary let properties would have massive ramifications for the local economy, losing £57m in economic activity.
Empty properties far exceed the number of short-term lets in the city, with secondary lets making up just 0.8% of dwellings in Edinburgh compared to 4% for empty homes.
While it focuses on Edinburgh, the report will undoubtedly be of interest to other local authorities monitoring the impact of their short-term let regulations.
The findings have been shared with Edinburgh Council and the Scottish Government. The self-catering industry is committed to evidence-based policymaking, ensuring that robust and reliable data underpins public policy affecting the self-catering industry and wider tourism sector.
The industry continues to argue that the Scottish Government’s short-term let regulations have produced unintended consequences for the sector while failing to meet its underlying policy objectives, and Edinburgh’s approach in particular has been beset by three legal setbacks, most recently with the Council’s u-turn on issuing three-month suspensions on licensing applications.
Graeme Blackett, Director of BiGGAR Economics, said:“This independent research has found that the economic impacts of short-term lets will tend to be greater than residential use.
“This is a result of guest spending in the local economy, for example in the hospitality sector. The guest spending supports jobs in the Edinburgh economy, as well as sustaining a greater range of hospitality and other local businesses than would otherwise be the case, contributing to the quality of life for residents.
“The short-term lets sector is contributing at least £154 million to the Edinburgh economy each year. Our research also found that short-term let properties account for only 1.5% of Edinburgh’s housing stock, with secondary lets at only 0.8%, too low a proportion to have a meaningful impact on the local housing market.”
Fiona Campbell, CEO of the ASSC, said: “This major research study verifies that secondary lets are a huge economic driver for the capital, supporting over 5,500 jobs, and providing a much-needed boost to other local tourism and hospitality businesses.
“It outlines a proper holistic assessment of Edinburgh’s unique housing market, showing that secondary lets only account for 0.8% of housing stock. For us, the message is clear: you can’t solve a housing crisis by producing a crisis in Scottish tourism by decimating local businesses.
“Instead, we’ve got to build our way out and tackle the increasing problem of empty homes. We sincerely hope that this independent study can help refocus the policy agenda and inform the ongoing regulatory discussions.”
Iain Muirhead, Co-Founder of STL Solutions, said:“Short-term lets play a crucial role not only in supporting Edinburgh’s thriving tourism industry, which benefits all residents, but also in accommodating hundreds of visitors each year who come for economically important purposes such as work, festivals, and the education sector.
“We hope that local councillors will take this report into consideration when shaping local policies, especially planning regulations, to ensure a balanced approach is achieved. As the report indicates, overly restrictive measures could lead to the emergence of a black market, undermining the objectives of a well-regulated licensing scheme.”
Ralph Averbuch, Spokesman for JfSCC, said: “This report clearly demonstrates that full time Scottish Self-Catering operators have never been the issue. Yet we have been hounded as if killing off this vital part of Scotland’s tourism offering would be a magic cure for decades of government missteps.
“Politicians of all colours felt we were useful scapegoats but this economic analysis pinpoints that the problem is population growth and insufficient affordable house building. This problem will never be resolved by attacking a group which makes up less than 1% of Edinburgh housing.
“What’s needed is bold government action on housebuilding. Politicians have pretended that a crackdown on Scotland’s self-caterers is bold. It’s not. It’s been a master class in misdirection.”
Residents and industry are being encouraged to share their experiences of Edinburgh’s short term lets (STL) licensing.
Available to take part in online until October, the Council has launched a 12-week consultation as part of a planned review of the local policy. This is in line with a decision taken in 2023 that the city’s policy would be reviewed after a year.
The exercise will allow residents, stakeholders and businesses affected by the operation of the scheme to offer comments and feedback, with targeted discussions with resident groups, industry bodies and other key stakeholders also set to take place. This will cover the Council’s approach to secondary letting, temporary exemptions, fees, and the application process.
Regulatory Convener, Councillor Neil Ross, said: “Since we launched Edinburgh’s STL licensing policy in October 2022, we’ve granted over 1500 applications. This is helping to ensure holiday lets are safe and properly regulated in our city.
“We now want to hear how the scheme has impacted the residents and businesses of Edinburgh. The opportunity for everyone to input into how the short term lets licensing scheme is working was a commitment we gave last year and over the coming weeks, we want to hear your views.
“I’m confident this will help us to better understand how people are finding the regulation through licensing of short-term lets in Edinburgh and help inform any future decision making.”
A report highlighting the results and further recommendations will be brought forward in the Autumn.
The following composite motion was passed at the meeting of the City of Edinburgh Council yesterday (Thursday 14 December):
Council:
1) Notes the decision of the Planning Committee on 23 February 2022 to designate the whole of the City of Edinburgh as a short term let (STL) control area, and the decision of 19 April 2023 to amend non-statutory guidance on STLs.
2) Notes that both committee decisions were unanimous, reflecting the strong cross-party consensus on the need to control the numbers of STLs in Edinburgh.
3) Notes the STL (Planning) Judicial Review issued by Lord Braid on Friday 1 December 2023, further notes the briefing note circulated to members on 6 December, and that the Council’s Planning service will consider the implications of the ruling in detail, including considering an appeal.
4) Notes Lord Braid’s finding that the Scottish Parliament did not intend that Section 26B of the Town and Country Planning Act 1997 should have retrospective effect by requiring planning permission to be applied for where a secondary STL was in operation prior to the coming into force of the Short Term Lets Control Area; and that the judgement reduces the whole of the amendment to the ‘Guidance for Businesses’ agreed by Planning Committee on 19 April 2023, including several changes which were outside the specific scope of the judicial review.
5) Notes that the judgement could have significant implications for the council’s approach to effective regulation of STLs.
Council therefore:
6) Agrees to reconvene the STL working group as soon as possible to consider the next steps for effective regulation of the STL sector in Edinburgh following the judgement, and on the practical implications of licensing powers in respect of potential breaches of planning control.
7) Requests that a report come to Planning Committee in one cycle (excluding any special Planning Committees) detailing the implications of the Judicial Review and what outcomes this will have on Short Term Let Planning Policy and the assessment of Short Term Let Planning applications, what implication this may have for the Council’s Short Term Let Licensing Scheme, and potential amendments to the ‘Guidance for Businesses’ which comply with the judgement. This report should also be sent to the Regulatory Committee and the Short Term Lets Working Group for information.
8) Agrees that the Leader of the Council should urgently write to the Minister for Local Government Empowerment and Planning to:
a) seek clarity of the position of the Scottish Government on the principle of retrospectively requiring planning permission for STLs within a control area and,
b) call for an emergency Bill to be introduced to the Scottish Parliament to address the legislative deficiencies in Section 26B, and failing that to consider what changes to primary or secondary legislation or other options might be required so Edinburgh Council can continue with its originally intended approach, as agreed cross-party.
With one month to go until Scotland’s short term lets licence deadline, the Council has reaffirmed its commitment to the scheme and the 1 October start date.
The need for clarity over Edinburgh’s commitment to the scheme followed comments made by council leader Cammy Day where he appeared to support calls for an extension to the deadline.
Notes the deadline of 1 October 2023 for existing landlords to apply for a license for a short term let (STL).
Notes the unanimous decision of all members of the Regulatory Committee on 6 February 2023 to “regret” the Scottish Government’s decision to delay the start date for STL licensing for existing landlords from 1 April to 1 October 2023.
Believes that a proper system of licensing is important to help address the significant issues within the short-term rental market which is why there was such strong cross-party agreement for a robust system of regulation.
Therefore, regrets the comments made by the Council Leader on BBC Radio Scotland on 23 August 2023, which might have led operators to assume or believe that the Council Leader, and by extension the Council, was open to a further extension to the 1 October 2023 start date when no such position has been taken, either by the Regulatory Committee or full Council.
Believes these comments, despite further clarifications, were damaging to the ongoing hard work of officers to encourage landlords to meet the 1 October 2023 start date by suggesting a dilution of this Council’s commitment to the proper and fair regulation of the short term let market in Edinburgh.
Therefore, Council:
Reaffirms its existing commitment to the licensing of short term lets, expresses its opposition to any further extension to the start date for licensing of existing short term let landlords and requests that this position be communicated strongly through the Council’s communications channels.
Agrees that the Council Leader will write to Scottish Ministers to convey that opposition and further welcomes recent comments from the First Minister and the Economy Minister that there will be no further extension to the 1 October start date. Calls on all existing STL operators to ensure they submit a licensing application ahead of the 1 October 2023 start date.
Agrees the outstanding briefing, outlining the state of readiness of the Council to process applications by 1 October 2023, will be circulated to Councillors before the Finance and Resources Committee meeting of 21 September 2023 to align with budget considerations.
In addition, a draft copy of the STL Enforcement report due to be presented to the 2 October Regulatory Committee should be circulated on a confidential basis to all councillors also before 21 September Finance & Resources Committee meeting.
Moved by: Councillor Neil Ross Seconded by: Councillor Susan Rae
The Scottish Government has reminded short-term let operators in Scotland to apply for a licence before the 1 October deadline, highlighting that no application so far has been rejected.
Licensing has been introduced to ensure short-term lets in Scotland are safe and meet consistent quality standards, including having gas certificates and suitable electrical equipment.
Official statistics published today, dating up to 31 March this year, show that across 32 local authorities, no applications submitted for a short-term let licence have been refused.
Housing Minister Paul McLennan said: “Quality short-term let accommodation is vital to Scotland’s tourism sector and wider economy. It aims to protect the reputation of responsible operators and ensure the sector is regulated in line with other accommodation such as hotels and caravan parks, giving guests assurance of consistent safety standards.
“There has been a lead time of almost two years to the October deadline. Official statistics published today cover only up to the end of March and we know many more hosts have applied in recent months.
“Operators can take confidence that local authorities are working pragmatically to support new licensees through the application process – and we can see from the information that no completed applications had been rejected in the period, or since.
“So, I would repeat calls to everyone within the industry to back the scheme and encourage short-term let operators to apply for a licence in good time and before the 1 October deadline.”
Maree McLeod, owner of The Gatehouse in Reay, near Thurso, said: “The licensing scheme will ensure guests know properties like ours are of the highest standard and are compliant with the latest safety regulations.
“I have spent a lot of time and money ensuring our business is of the highest quality. We try our best to do the best. It is therefore pleasing that other short-term lets will be brought to that same level. By doing this, Scotland will become an international leader in this market.
“The process of applying for a short-term let with Highland Council was made easy and straightforward because of the really helpful team there. I would encourage every owner to go through the process of obtaining a licence. It not only marks out the property as a leader in its class, it marks out the owners too.
“Our business has improved through this process.”
Short term let licences last for three years, the average cost of applying is set out below:
Home sharing application median fee range £250 – £390
Secondary let application median fee range £333 – £550
Median fee for a home share let with occupancy of 2 – £257
Median fee for a secondary let with occupancy of 4 – £405
Median fee for a secondary let with occupancy of 6 – £451
Median fee for a secondary let with occupancy of 10 – £518
An average 6 occupancy (often 3 bedroom) property, which required new safety certification, would pay £451 for a licence, which would last for three years, plus around £290 in safety certification and a £59 EPC certificate.
Existing short-term let hosts across Edinburgh have less than two months to submit their application for a licence and new hosts need to obtain a licence before they can start accepting bookings or receiving guests.
• The deadline for existing hosts, anyone who operated a short-term let before 1 October 2022 to apply for their short-term let licence is before 1 October 2023.
• The licensing scheme aims to establish consistent standards of accommodation across Edinburgh benefiting visitors and local communities.
• Existing hosts of short-term let accommodation can continue to let out their accommodation while the council makes a decision about their licence application.
• The licence costs depend on the property location, size, and type of let.
Hosts of short-term let accommodation across Edinburgh are being urged to apply for a licence under Scotland’s short-term let licensing scheme. Edinburgh Council’s licensing scheme is currently in operation.
As well as establishing one consistent standard across Scotland for guests and hosts, the short-term let licensing scheme is being introduced to support the communities within which they operate.
It enables local authorities to effectively address local concerns such as increased congestion and investment in community infrastructure, whilst balancing the associated economic benefits of tourism in the area.
Jordan Mitchell, Director, Short Stay St Andrews, said:“As the largest holiday letting agency in St Andrews and the East Neuk, the initial thought of an application process for short-term letting our 130+ managed properties was a daunting one. However, the application process has been plain sailing once we had all the required safety certifications in place.
“Fife Council has been extremely supportive in its quest to process the applications despite the extra pressure on its systems. I can only recommend applying as soon as possible to give your business plenty of time to adjust to the new Scottish Government requirements.”
Paul & Julie Allan, Ayres Rock Hostel and Campsite, Sanday, said: “It was a huge relief to get things sorted.
“Orkney Island Council licensing team were supportive through the whole process and were a good contact point for information and checking the application was filled out correctly.”
Housing Minister, Paul McLennan said: “Short-term let accommodation plays an important role in Scotland’s economy, supporting our tourism and hospitality sector and allowing tourists and holiday goers somewhere to take them closer to the best Scotland can offer.
“I would like to thank those who have already signed up to the scheme across Edinburgh, bringing assurances to tourists that their safety is paramount and that they have met local guidelines.
“There are less than two months to go until the 1 October deadline and so I would urge anyone who owns short-term let accommodation and has yet to apply to do so as soon as possible to ensure you can still take bookings and welcome guests from far and wide.”
For more information about the licensing scheme, whether your accommodation requires a licence and how to apply visit gov.scot/shorttermlets.
Convener of Regulatory Committee, Neil Ross, said: “The Council was successful in defending large parts of the policy and the Court did not criticise any aspect of the Council’s consultation nor the evidence base which it used to reach its decision. Having reviewed the Court’s decision in detail, the Council has decided not to appeal the ruling.
“We have changed our policy to reflect the decisions reached by the court, which took effect from 13 July, and the date for applying for a licence is 1 October. Existing hosts and operators have until that date to submit an application for a licence.”
Owners of short-term let properties are being urged to apply for a licence under Scotland’s short-term licensing scheme before the 1 October 2023 deadline.
Short-term let hosts must apply for a licence with their relevant local authority before the deadline. Anyone who operated a short-term let before 1 October 2022 can still accept bookings and guests until an application is determined, but must apply before the 1 October 2023 deadline. Owners who started operations after 1 October 2022 cannot begin trading until they receive their licence.
Hosts must apply for a licence with the local authority their property is located and are being urged to check local criteria before making an application.
Local councils’ licensing schemes are in operation across Scotland and many short-term let hosts have already obtained licences.
Housing Minister Paul McLennan said: “Short-term let accommodation plays an important role in Scotland’s economy, supporting our tourism and hospitality sector and allowing tourists and holiday goers somewhere to take them closer to the best that Scotland can offer.
“However, it is also important that there is appropriate regulation in place to ensure the safety of guests, and so that local authorities can make decisions that are right for their local areas. That is why the Scottish Government has introduced the short-term lets licensing scheme.
“I would like to thank those who have already signed up to the scheme, bringing assurances to tourists that their safety is paramount and that they have met local guidelines.
“Visitors coming to Scotland can already expect to see the benefits of properties being licensed and meeting specific standards. Meanwhile, the thousands of short-term let operators who provide a quality service can have the assurance that would-be competitors have to meet licensing standards as well.
“There is only two months to go until the 1 October deadline and so I would urge anyone who owns short-term let accommodation and has yet to apply to do so as soon as possible to ensure you can still take bookings and welcome guests from far and wide.”
Short Stay St Andrews Director Jordan Mitchell said: “As the largest holiday letting agency in St Andrews and the East Neuk, the initial thought of an application process for short-term letting our 130+ managed properties was a daunting one.
“However, the application process has been plain sailing once we had all the required safety certification in place.
“Fife Council has been extremely supportive in its quest to process the applications despite the extra pressure on its systems.
“I can only recommend applying as soon as possible to give your business plenty of time to adjust to the new Scottish Government requirements.”
Owners have until 1 October 2023 to apply for a short-term lets licence, with local authorities required to process applications by 1 October 2024.
