‘Pragmatic approach’ to support hosts during cost of living crisis
Recognising the pressures short-term lets hosts face at this time, legislation has been laid to extend the deadline for applying for a licence by six months to 1st October 2023.
The new deadline applies to anyone operating as a host before 1 October 2022. Anyone who started operating after that must have applied for and obtained a licence before accepting guests and bookings.
Housing Secretary Shona Robison said: “We are taking a pragmatic approach to help support hosts in recognition of the wider cost of living crisis that is placing pressure on businesses. This one-off six-month extension will give businesses more time to spread the cost of the licence fee, and meet the scheme requirements.
“The principal component of our licencing scheme is a mandatory set of safety standards which many hosts will already be meeting as a matter of best practice or compliance with existing law. Our scheme gives local authorities the powers to strike a balance between the economic and tourism benefits of short-term lets and community concerns.
“Many hosts have already applied for a licence. I encourage those that have yet to do so to apply for a licence well in advance of the extended deadline.”
New hosts must now apply for, and obtain, a licence before accepting bookings or receiving guests.
Anyone who operating as a host before 1 October 2022 can operate as normal while their application is being determined.
The City of Edinburgh Council is consulting on new planning guidance to be used as the Capital became the first short term let control area in Scotland last month.
This followed new Scottish Government legislation in 2021. In a control area, these new laws mean if you offer a flat or a house for a short term let that is not the home you live in, you will need planning permission for it.
Now that Edinburgh is a control area, the Council has updated its proposed guidance and is looking to get views on it from anyone with an interest including residents, those operating short term lets and those involved in the tourism industry, by Thursday, 22 December.
Planning Convener James Dalgleish said:“The control area was put in place in Edinburgh last month. This is a huge step forward in tackling issues caused by short term lets across the city.
“It’s so important that those operating short term let accommodation can only do so if they have planning permission where this is needed. Going forward the control area and guidance will greatly simplify the process and make it clearer how decisions will be made for all involved.
“Following extensive consultation, we’ve also just agreed the licensing scheme for short term lets in Edinburgh which addresses concerns around the management of secondary letting. When applying for a licence applicants will also have to make sure they have the right planning permission in place.”
Measures to establish consistent standards across the country
A new licensing scheme for short-term let hosts opens today [1 October], aiming to ensure consistent safety standards while reinforcing the positive reputation of Scottish tourism and hospitality.
The licensing scheme was developed in response to concerns raised by residents about the impact of short-term let properties on their local communities. It gives councils flexibility to develop licensing schemes that meet local needs, and sits alongside powers for councils to establish short-term let control areas.
To comply with the licence, hosts will be required to meet a set of mandatory conditions which apply across Scotland, plus any additional conditions set by their council.
Anyone operating as a host before 1 October has until 1 April 2023 to apply for a licence and can operate until their application has been determined. New hosts must obtain a licence before accepting bookings and welcoming guests to stay.
A targeted digital marketing campaign to promote the licensing scheme also launches today.
Housing Secretary Shona Robison said: “Our new licensing scheme will support responsible operators and give guests the confidence that their short-term let – be it a flat in Edinburgh, a property for a business trip to the Borders, or a cottage in the Highlands – meets the same set of safety standards.
“These new conditions include measures such as displaying an energy performance rating on listings, or securing valid buildings and public liability insurance. We know the vast majority of short-term lets businesses are already following these safety standards as a matter of best practice, and some are already required by existing legislation.
“We know short-term lets make a positive contribution to Scotland’s tourism industry and local economies, and these measures will allow them to continue doing just that while ensuring this is balanced with the needs of local residents and communities.
“The deadline for applications from existing hosts is 1 April, and I would urge all hosts and operators to contact your local authority as early as possible to learn how to apply.”
Malcolm Roughead, CEO at VisitScotland, said: “The small accommodation sector is a key contributor to the economy and our high-quality and varied offering is one of the things that makes Scotland such a special destination.
“Through an Industry Advisory Group, we’ve been working closely with representatives from across the sector ahead of introduction of the licensing schemes.
“We’ll continue to give both new and established businesses the right advice to help them through the process of applying for a short-term let licence.”
Planning permission required for Edinburgh’s short-term let conversions
A measure to help maintain the availability of long-term residential housing in Edinburgh has been approved.
Edinburgh will become Scotland’s first designated Short-Term Let Control Area after the Scottish Government approved the City of Edinburgh Council’s proposed change to planning requirements.
The control area is intended to preserve the character of neighbourhoods, prevent short-term lets in inappropriate places or types of building, and help ensure homes are used to their best effect. With a few exceptions, changing the use of an entire residential home in the city to short-term letting will automatically require planning permission.
Housing Secretary Shona Robison said: “Edinburgh was the first local authority in Scotland to propose a Short-Term Let Control Area and Scottish Government approval represents a major step forward.
“We have committed to give local authorities the powers to address concerns about the impact of commercial short-term letting in their communities, should they want to do that. This is an example of that local choice in action – supported by the majority of respondents to the council’s consultation on the proposed designation.
“I recognise the important role which short-term lets play as a source of flexible and responsive accommodation for tourists and workers, which brings many benefits to hosts, visitors and our economy. However, we know that in certain areas, particularly tourist hot spots, high numbers of lets can cause problems for neighbours and make it harder for people to find homes to live in.
“The Scottish Government considers that the council has adequately considered and responded to concerns raised before seeking approval of the control area designation. We have concluded that the proposed designation would be reasonable.”
Leith MSP Ben McPherson said: “As a constituency MSP, after being part of an Edinburgh SNP team who have pushed for action on this for some time, I’m pleased that today it has been confirmed by The Scottish Government that Edinburgh will become Scotland’s first designated Short-Term Let Control Area.
“Planning permission will be required for Edinburgh’s short-term let conversions. This measure will help maintain the availability of long-term residential housing in Edinburgh.”
City Council Leader Cammy Day said: “This is the news we have been waiting for after leading the way in campaigning for change. I am delighted that Ministers have answered our calls and we look forward to reviewing the full details included in the decision released today.
“It paves the way for Edinburgh becoming the first short-term let control area in Scotland. For far too long, too many homes have been lost in our city to the holiday market. In fact, around a third of all short term lets in Scotland are here in the Capital, so their associated issues of safety, anti-social behaviour and noise have a detrimental effect on many of our residents. We will now progress implementing the changes and the next step should be looking at whether we can apply a cap on numbers, too.”
The control area covers the entire City of Edinburgh Council area. Where a dwellinghouse is in a control area, a change of use to secondary letting will always require planning permission unless the exceptions set out in legislation apply.
Where the change of a dwellinghouse to a short-term let took place before the designation of the control area the existing planning rules will apply. These require planning permission for a change of use of property where that change is a material change in the use of the property.
It was always on the cards that if restrictions were to be introduced on short-term letting in Scotland, Edinburgh would be first out of the blocks. And, sure enough, the council last month introduced a city-wide “control zone”.
The capital, which for obvious reasons is the country’s tourist Mecca, has become a magnet for Airbnb-style short-term lets over the last decade, leading to concerns about housing shortages and perceptions about anti-social behaviour.
Under draft proposals which will now go to Scottish Government Ministers for final approval, property owners will soon need planning permission to be able to operate short-term lettings and will have to apply for a change of use certificate from the planning department.
What is less well known is that the council has always had the power to require planning permission in the event of a material change in environment, such as short-term rentals. The difference is that, from now on, this will be mandatory.
It should be noted that the proposals only apply to secondary lettings, i.e., properties which are not an owner’s primary residence. People will still be able to let out their homes while on holiday, or rooms in their home while they remain in residence.
However, while the new restrictions appear to be forging ahead, it still remains unclear what policies the local authority will eventually apply. The current Development Plan – the overarching guide to future council thinking – makes no mention whatsoever of short-term lets.
Nor, surprisingly, does the document designed to replace it, the City Plan 2030, which again does not concern itself with the issue – making it increasingly difficult for property owners to plan ahead.
One can only speculate at the moment about whether permissions will be granted for continued short-term use, and on what grounds. Nor is there any clarity about whether numerical limits will be imposed.
Were there to be limits, it would be reasonable to assume that applications would be allocated on a first-come, first-served basis, so landlords hoping to remain in the market might be advised to act sooner, rather than later.
There is, of course, an existing provision in law whereby if a short-term let has been operating for more than 10 years, with no action against it by the council and no action to conceal its operation, then it is entitled to a Certificate of Lawfulness to continue operation, though necessary evidence will be required.
As of the start of this month, there have been nine applications so far this year for planning permissions for short-term lets, only two of which have been granted – and they both involved Certificates of Lawfulness.
What to do if applications fail is clearly now a matter of immediate concern for property owners and DM Hall’s specialist rural arm Baird Lumsden is currently embarked on an information campaign around the sales, letting and management options which remain open.
It has gone into the issue in depth, in anticipation that Highland Council will be the next authority to impose short-term let restrictions around the Badenoch and Strathspey area, and is reaching out to concerned parties.
Informed and impartial advice of this nature is something of a port in a storm for property owners who are caught between a rock and a hard place as the restriction net tightens.
There has been anecdotal evidence of landlords exiting the short-term market and moving to longer lets in the private rental sector. But regulation in this sphere of activity is getting stricter all the time, and the imminent New Deal for Tenants will do nothing to ease landlord pain.
On a superficial level, it is easy to understand the council’s hope that properties taken out of short-term lets will find their way back into the housing stock, thus easing ongoing shortages.
But a counter-argument, articulated by bodies such as the Association of Scotland’s Self-Caterers, is that lack of house-building is as much of a contributory factor to shortages, and that short-term lets bring in huge volumes of valuable tourism revenue to the city.
As things are, some smaller operators may indeed be forced to sell up and quit the market, although larger letting concerns will almost certainly continue to jump through the necessary hoops.
In this volatile environment, expert professional advice is the only real safeguard, and prudent property owners and landlords will seek it out as timeously as possible.
Calum Allmond is Head of Architectural Services at DM Hall Chartered Surveyors.
For further information, contact DM Hall Chartered Surveyors, 27 Canmore Street, Dunfermline KY12 7NU. T: 01383 621262. E: dunfermline@dmhall.co.uk.
All short-term let properties will require a licence to ensure they are safe and the people providing them are suitable, under legislation approved by the Scottish Parliament.
Local authorities will be required to establish a short-term lets licensing scheme by 1 October 2022, and existing hosts and operators will have until 1 April 2023 to apply for a licence.
The legislation was developed in response to concerns raised by residents and communities about the impact of short-term let properties on their local communities, including noise, antisocial behaviour and the impact on the supply of housing in some areas.
Housing Secretary Shona Robison said: “This legislation is a significant milestone on our path to bringing in an effective system of regulating short-term lets.
“Our licensing scheme will allow local authorities and communities to take action to manage issues more effectively, without unduly curtailing the many benefits of short-term lets to hosts, visitors and the economy.
“We have already introduced legislation allowing councils to establish short-term let control areas and manage numbers of short-term lets. This is the next step to delivering a licensing scheme that will ensure short-term lets are safe and that allowing them to continue to make a positive impact on Scotland’s tourism industry and local economies while meeting the needs of local communities.
“This legislation covers the whole of Scotland, including island and rural communities, and offers flexibility to local authorities in how it is implemented based on local needs and concerns.
“We appreciate the input from tourism bodies, local government, community organisations, residents and others in reaching this point.”
Welcoming the announcement, city council leader Adam McVey said: “This is fantastic news for residents. After our call for this legislative change we worked with the Scottish Government as they consulted on this issue and how the details of a licensing scheme would work.
“I’m really pleased all short term lets will now need a licence making them much easier to control not only in terms of overall impact on our housing supply but also help us deal with any anti-social behaviour and noise issues.
“It’ll mean whole properties being let out as short term lets will need to have ‘change of use’ planning permission before they can be granted a licence. This will help to stop homes being taken out of residential use or being let out when they are unsuitable or unsafe.
“In addition to this, councillors will consider a report next month on whether we should apply to the Scottish Government for Edinburgh to become a ‘short term let control area’. Enforcement of planning legislation is a costly and lengthy process. If approved, many properties being used as short term lets would automatically require to have planning permission in place.”
All short-term let properties will require a licence by July 2024.
Councils will be given powers to ensure short-term lets are safe and meet the needs of their local communities under legislation laid before the Scottish Parliament.
Under the legislation, all local authorities will be required to establish a short-term lets licensing scheme by October 2022. Existing hosts and operators will have until 1 April 2023 to apply for a licence for each property that they operate as a short-term let. All short-term lets in Scotland will have to be licensed by 1 July 2024.
The legislation was developed after residents across Scotland raised significant concerns about the impact of short-term lets on their communities, including noise, antisocial behaviour and the impact on the supply on housing in some areas.
It will ensure the needs and concerns of communities are balanced with wider economic and tourism interests.
Housing Secretary Shona Robison said: “We have already introduced legislation allowing councils to establish short-term let control areas and manage numbers of short-term lets. This is the next significant step to delivering a licensing scheme that will ensure short-term lets are safe and the people providing them are suitable.
“We want short term lets to continue making a positive impact on Scotland’s tourism industry and local economies while meeting the needs of local communities.
“Short-term lets can offer people a flexible travel option. However, we know that in certain areas, particularly tourist hotspots, high numbers of lets can cause problems for neighbours and make it harder for people to find homes to live in.
“The licensing scheme and control area legislation give councils the powers to take action where they need to.
“We appreciate the input from tourism bodies, local government, community organisations and others in reaching this point, and look forward to delivering a short-term lets licensing scheme that works for Scotland.”
Further information on the Scottish Government’s short-term lets legislation is available online.
If, following the public consultation, the Council gives the go ahead and the proposal is approved by the Scottish Government, the new powers would mean all residential properties, which are not an owner’s principle home, being let as STLs in their totality throughout the local authority area would require approval of a ‘change of use’ to a STL from Planning.
Around a third of STLs in Scotland are in Edinburgh. At the moment, in addition to planning applications made for STLs, to establish whether or not planning permission is required for properties where this is disputed, the Council’s enforcement team looks at each case individually, which is a very lengthy and time consuming process.
The introduction of powers to make a control area, follows the Council calling for new legislation to tighten up the control of STLs to help manage high concentrations of secondary letting where it affects the availability of residential housing or the character of a neighbourhood.
Also, it will help to restrict or prevent STLs in places or types of buildings where they are not appropriate as well as making sure homes are used to best effect in their areas.
Generally renting out a room/s in your house or letting your property whilst on holiday would also still be allowed if Edinburgh became a STL control zone.
The Scottish Government is currently consulting on legislation to introduce a new licensing regime next year, which the Council also called for, to address the issues of safety, anti-social behaviour and noise. These issues have all had a detrimental effect on communities as the number of STLs has greatly increased across the city in recent years.
The proposal is that all Scottish councils will have to adopt a STL licensing system by October 2022. In terms of the Government’s proposed new licensing regime, if Edinburgh becomes a control area it will be a mandatory condition of any licensing application to have made a planning application or to have planning permission already when providing accommodation that requires it.
Councillor Neil Gardiner, Planning Convener for the City of Edinburgh Council, said: “We’ve worked hard calling for greater controls for short term lets and so it’s great we’re now asking for your views on the whole city becoming a control area.
“This is a positive step forward as Edinburgh has almost a third of all STLs in Scotland and so we need to take action. They’re putting pressure on house prices and rents and taking houses out of supply as well as causing issues such as anti-social behaviour and the hollowing out of communities.
“We’re really keen to hear views from residents in all communities across the city and the industry and we’ll carefully consider all of the feedback you give us before the proposal is finalised as the impact of STLs can be felt in communities across Edinburgh.”
Councillor Maureen Child, Planning Vice-Convener for the City of Edinburgh Council, said: “If we do proceed with this approach and it’s approved by the Scottish Government, we’ll be better able to manage the number of STLs in the city.
“Many properties being let out in a control area would automatically require to have ‘change of use’ planning permission in place and I’m pleased the Scottish Government is also proposing that when people apply for a licence we can ask for evidence of that.”
A consultation is set to begin next month following consideration of a new report outlining a draft proposal to designate the whole city as a short term let (STL) control area.
If, following the consultation, the Council gives the go ahead and the proposal is approved by the Scottish Government, the new powers would mean all residential properties, which are not an owner’s principle home, being let as STLs in their totality throughout the local authority area would require approval of a ‘change of use’ to a STL from Planning.
Around a third of STLs in Scotland are in Edinburgh. At the moment, in addition to planning applications made for STLs, to establish whether or not planning permission is required for properties where this is disputed, the Council’s enforcement team looks at each case individually, which is a very lengthy and time consuming process.
The introduction of powers to make a control area, follows the Council calling for new legislation to tighten up the control of STLs to help manage high concentrations of secondary letting where it affects the availability of residential housing or the character of a neighbourhood.
Also, it will help to restrict or prevent STLs in places or types of buildings where they are not appropriate as well as making sure homes are used to best effect in their areas.
If a home has been changed to secondary letting and continually operated as a STL for more than 10 years before a STL control area is designated and no enforcement action has been taken during that time, planning permission is not required. Also, generally, renting out a room/s in your house or letting your property whilst on holiday would also still be allowed if Edinburgh became a STL control zone.
The Scottish Government is currently consulting on legislation to introduce a new licensing regime next year, which the Council also called for, to address the issues of safety, anti-social behaviour and noise. These issues have all had a detrimental effect on communities as the number of STLs has greatly increased across the city in recent years.
The proposal is that all Scottish councils will have to adopt a STL licensing system by October 2022.
In terms of the Government’s proposed new licensing regime, if Edinburgh becomes a control area it will be a mandatory condition of any licensing application to have made a planning application or to have planning permission already when providing accommodation that requires it.
Cllr Neil Gardiner, Planning Convener, said: “Last year we welcomed that our call for new Scottish Government legislation to control STLs was successful. If the proposals are approved by the Planning Committee, we’ll be in a position where we can push forward and ask our residents, the industry and other interested groups, for their views on making the whole of Edinburgh a STL control area.
“We’ll be looking carefully at this feedback before the proposal is finalised as the impact of STLs can be felt in communities across Edinburgh.
“If the Scottish Government approve the whole city as a STL control zone, we’ll be able to manage the number of STLs in the city as properties being let out in these areas would automatically require to have ‘change of use’ planning permission in place.
“It’s also good news that the Scottish Government is proposing that when people apply for a licence we can ask for evidence that they have that planning permission. This is something we’re very keen to do and our ‘Choices’ consultation responses for our next local development plan – ‘City Plan 2030’ – showed overwhelming support for control zones.
“Combined with the proposed licensing regime due to be introduced next year, if approved, this step forward is in direct response to our hard work in pushing for the powers we know we need to deliver for our communities city-wide.”
Maureen Child, Vice-Convener of the Planning Committee, said: “It’s great to see so much progress being made to tackle this issue we have campaigned so hard to address.
“This is so important as STLs have reduced the city’s housing stock, hollowed out communities and caused numerous issues for residents such as noise and other anti-social behaviour.
“I look forward to seeing these new powers being used to improve the lives of many of our residents throughout the city.”
There are a significant number of short-term lets in Edinburgh, with the Airbnb platform providing a useful indicator of the scale of this in the city.
In the period 2016-2019 there was a substantial rise in the number of both entire properties and rooms registered with Airbnb.
Relative to other areas in Scotland the number of Airbnb listings is high making the impact on the city disproportionate.
In 2019, 31% of all Airbnb listings in Scotland were in the city of Edinburgh. The next greatest proportion was 19% in Highland followed by 7% in Glasgow City. This illustrates the magnitude of STLs in Edinburgh in comparison to other areas of Scotland.
Balancing neighbourhood needs with tourism interests
Consultation on the details of a licensing scheme for short term lets will take place over seven weeks this summer.
Social Justice Secretary Shona Robison has announced the publication of a draft licensing order for consultation, ahead of laying the final legislation at the Scottish Parliament in September.
Stakeholders will now have until 13 August to comment on the licensing order and the draft business and regulatory impact assessment.
Draft guidance documents have also been published to explain how the legislation would work in practice.
Ms Robison said: “Regulation of short term lets is vital if we are to balance the needs and concerns of our communities with wider economic and tourism interests.
“Short-term lets can offer people a flexible and cheaper travel option and have contributed positively to our tourism industry and local economies across the country.
“However, we know that in certain areas, particularly tourist hot spots, high numbers of short-term lets can cause problems for neighbours and make it harder for people to find homes to live in.
“By allowing local authorities appropriate regulatory powers through a licensing scheme, we can ensure that short term lets are safe and address issues faced by local residents and communities.
“It will allow local authorities to understand more fully what is happening in their areas and assist with the effective handling of complaints.”
Under the proposed legislation, local authorities will have until 1 October 2022 to establish a licensing scheme, with all short-term lets to be licensed by 1 April 2024. Existing hosts and operators must apply for a licence by 1 April 2023.
The Scottish Government previously withdrew the Licensing Order from the Scottish Parliament in February. This was to allow for draft guidance to be developed with input from the stakeholder working group.
Ms Robison added: “We want to get this legislation absolutely right. A stakeholder working group was established earlier this year to develop guidance on the licensing scheme that was clear, comprehensive and easy to understand.
“As part of this, the Scottish Government also set out to allay any unfounded concerns and actively explore solutions to any real issues, with a view to making any necessary adjustments to the Licensing Order.
“Stakeholder working group members have helpfully made a range of suggestions for adjustments to the Licensing Order, as well as providing very significant contributions to drafting the guidance.”
The consultation runs until Friday 13 August 2021.
The consultation paper on draft licensing legislation for short-term lets in Scotland and supporting documents can be found here: gov.scot/publications/short-term-lets/.
