‘Pragmatic and significant’ changes to licensing scheme for short term lets

Powers to take into account overprovision of short term lets in an area will be scrapped, along with a reduction in public liability insurance requirements, as part of ‘pragmatic and significant’ changes to the licensing scheme for holiday lets in Scotland.

Short term lets have been a controversial topic.

Social Justice Secretary Shona Robison has outlined changes in a letter to the Local Government, Housing and Planning Committee, ahead of laying the licensing legislation in the Scottish Parliament next month in a move which she said will take into consideration the views of stakeholders, as well as ensuring that short term lets (STL) are safe and address issues faced by neighbours.

Short term letting organisations welcomed the news, but warned that conversations remain ongoing over details of how the licensing scheme – which will force STL landlords to comply with health and safety and other regulations - would work.

Locals residents have raised issues in areas where there are a lot of short term lets, such as central Edinburgh, as well as popular rural areas such as Skye, citing antisocial behaviour and noise disturbance. In February, the Scottish Parliament passed legislation designed to make it easier for local authorities to manage the STL market, allowing councils to establish STL control zones, which would require any property operating as a STL for more than 28 days a year to get planning consent.

The decision will mainly affect short term let properties in areas which are not in a control zone, meaning that they cannot be refused a licence solely for the reason that there are too many other lettings close by. Those in a control zone will potentially still have to apply for a planning change of use, when overprovision will be one of the factors taken into account.

The City of Edinburgh Council has proposed to turn the whole city into a control zone, to stop the problem being pushed from one neighbourhood to another and has put this proposal out for consultation.

The measures laid out by Ms Robison include: the removal of overprovision powers from the legislation; a simplification of the way that neighbours are notified about licence applications; reducing public liability insurance requirements; and removing personal names from the public register.

Revised guidance will be developed with stakeholders, with an emphasis on a “risk-based, intelligence-led approach” to property inspections; keeping costs and fees under control; and using all the flexibilities in the legislation to facilitate responsible home sharing and bed and breakfast.

Ms Robison said: “Regulation of short-term lets is vital to balance the needs and concerns communities have raised with wider economic and tourism interests.

“Following our recent consultation and engagement with stakeholders, we are making some pragmatic and significant changes to improve the proposed legislation.

“We are therefore addressing issues raised by stakeholders whilst still allowing licensing authorities to ensure short-term lets are safe and address issues faced by neighbours.”

She added: “This means local authorities can respond to the needs and concerns of local communities and neighbours to short-term lets without imposing onerous bureaucracy on responsible tourism businesses.

“I am grateful to those stakeholders who have taken part in the consultation. I look forward to continuing to work constructively with the tourism sector and councils to finalise and implement the licensing scheme effectively.”

Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers, welcomed the news, but warned that the licensing scheme proposals at national level and the planning control areas at a local council level are creating a “perfect storm of uncertainty” for small business.

She said: “Specifically, we endorse the decision to remove overprovision from the licensing regime, which was a duplication with planning policy. This recognises that the government’s objective with the regulations was about ensuring health and safety across all short-term lets, not addressing housing issues.”

“However, the devil is in the detail and conversations remain ongoing. A number of important industry concerns remain, most notably the disproportionate financial impact of licensing fees on small and micro tourism accommodation businesses who are still in survival mode due to the crippling effects of the pandemic.”

UKHospitality Scotland’s executive director Leon Thompson said: “Today’s announcement from the Scottish Government on changes to the proposed licensing scheme for short term lets takes us a step closer to the introduction of parity for all tourism accommodation providers in Scotland.

“UKHospitality Scotland has consistently called for the introduction of licensing for short-term lets to achieve a level playing field. This is to ensure our members do not continue to be put at a financial and competitive disadvantaged by the expanding rental market."

He added: “The changes set out by the Cabinet Secretary for Social Justice, Housing and Local Government, following a third consultation on licensing, demonstrates that the Scottish Government has genuinely listened to stakeholders on all sides of this conversation. UKHospitality Scotland looks forward to continuing to participate in the dialogue, as legislation moves to the Scottish Parliament and guidance around the scheme is developed by the industry working group.”

However bosses at Airbnb said more changes could still be made.

It said: "We are encouraged to see the Scottish Government listening to the concerns raised by Airbnb, the host community and industry partners on the impact the original measures could have on Scottish tourism.

"However, we still believe more progress should be made. It is vital that issues such as the proposed system's fees and the administration burden for hosts are properly addressed and we are committed to working with the Scottish Government to ensure this happens."

Lothians MSP Sarah Boyack said: “We need a practical system that will work, to protect both neighbours and those renting properties, that is affordable for those applying for permission and is straightforward for councils to administer given the 14 years of cuts they have experienced from the SNP Government.

“In Edinburgh we need to see progress on the Short Term Let control area which the council put out to consultation last month.”

Councillor Catherine Fullerton, regulatory convener at Edinburgh Council, said: “Short term lets continue to hollow out communities in Edinburgh, reducing housing supply, increasing housing costs and causing anti-social behaviour.

"We’ve been working with the Scottish Government to help develop much needed regulatory powers for these types of properties and we look forward to continuing that co-operation, along with other stakeholders, to deliver an effective and robust licensing scheme as soon as possible. We are also really keen to hear residents views on our plans for a proposed short term let control area, which will give us extra planning powers in relation to short term lets and I would encourage you to have your say.”

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