Category: Legislation

Short-term lets are often presented as being a leading cause of Scotland’s housing crisis, especially within Edinburgh. However, it is important to place the debate in a holistic context – for instance, noting the number of empty homes in Scotland, demographic changes, and the need to build more homes – while recognising the value of tourist accommodation to the Scottish economy and local communities.

Self-catering is hugely important to Scottish tourism in terms of jobs, revenue, and world-class experiences offered to guests. To be such an essential part of Scotland’s tourism mix is even more remarkable for our sector, which generates £867m per year, when most self-caterers operate small or micro businesses. Our professional self-caterers are diligent and considerate business owners who are too often unfairly maligned. They do not, for example, ‘hollow out communities’, as some have claimed, but rather are part of local communities across Scotland and have been for many, many years.

In Lothian, self-catering is worth £71m to the local economy. Such self-catering properties are legitimate, bona fide businesses whose owners depend on the money generated for their livelihood.

There is no empirical data which demonstrates a link between short-term lets and the housing market; moreover, we know that there are five times as many empty homes in Scotland than self-catering units. At no point will this legislation tackle homelessness or depopulation as alleged by some MSPs.^[1]

• The Scottish Government’s draft BRIA for short-term let licensing references research noting that there were approximately 32,000 active listings on Airbnb in May 2019.[2] However, this does not mean that there are 32,000 short-term lets which would be readily available on the long-term housing market as many have erroneously claimed.
• The number of listings on online platforms in any given area is not necessarily an indication of impact on long-term housing. For example: (a) many of these properties are already the primary residences of individuals involved in ‘homesharing’ who share a room(s), or their entire home while away; (b) each listing does not represent a single housing unit. A property can have multiple listings; and (c) marketing platforms like Airbnb contain a diverse range of accommodation including hotels and B&Bs, as well as unconventional accommodation like yurts, barns, boats, and campervans and one train, which cannot be seen as housing stock.
• Parliamentary answers from the Scottish Government[3] confirm the BRIA figures were from scraped data provided by InsideAirbnb (not from Airbnb directly) and that they could not break this down by property type – be it a single/shared room, entire property, or unconventional accommodation. This means the estimation there are 32,000 “short-term lets” is wholly unreliable. It is also based on pre-pandemic 2019 figures. Moreover, they admit “we do not have an estimate of how many short-term lets will return to the long-term housing market.”[4]

A Holistic Discussion on Housing

The housing challenges facing Scotland are far more multifaceted than the existence and growth of short-term and holiday lets alone. For instance:

• There are currently 47,333 empty houses in Scotland (of which 7152 are in Edinburgh, 3536 in Glasgow, 2943 in Fife, 2595 Highland).[5] These empty homes could be utilised for far more productive purposes and provide homes for those who need.
• Empty and second homes are concentrated in different parts of the country. For example, remote rural areas have a higher percentage of empty and second homes than urban areas[6]. However, City of Edinburgh is a hotspot for empty homes in Scotland.
• City of Edinburgh has had the largest increase in absolute number of households (17,300), an increase of 8%.[7]
• 172,170 houses were built between 2010-2019 (18,118 in Edinburgh)[8] – and we need many more. Homes for Scotland have argued that Scotland has amassed a housing shortfall of 85,000 homes and that we need to build at least 25,000 per year to meet the demands of our population.[9]
• When housing demand and the level of empty housing is set against the number of self-catering units, it suggests self-catering activity is not of a scale sufficient to affect housing supply issues in Scotland. Ultimately, building too few homes remains the core cause of Scotland’s housing problems, not the holiday let sector.

Any regulations pursued should to be underpinned by robust empirical data. Unfortunately, there has been a tendency to focus on so-called ‘scraped data’ from Airbnb which can lead to misleading conclusions about the nature of the short-term letting landscape in Scotland.

Facts:

• There are 1,404 Self-Catering Units (SCU) on non-domestic rates in Edinburgh (4^th August 2022).
• According to AirDNA, which the Scottish Government has used to underpin its numbers, in July 2019 there were 12,260 Airbnbs in Edinburgh (8677 entire properties).
• In July 2021, there were 5803 Airbnbs (4416 entire). These properties are distributed across the entire Edinburgh and Lothian area – not specific to the city centre.
• If you really dig down, there are less than 300 entire STL properties in the City Centre ‘ hot spot’. The numbers quoted in the recent reports are therefore completely out of date.
• To put all of the above into context, there are more than 250,000 dwellings in Edinburgh.

If you have been aware of the conversation concerning Edinburgh short term lets over the past few years, you will probably have read that there are 12,000 Airbnbs in Edinburgh. 12,000 Airbnbs. That seems like a massive figure, doesn’t it? So, is it a statement of fact or fiction? Let’s take a look…… 

With the Edinburgh Festival Fringe descending on the city, and the capital’s streets, venues – and properties – bursting at the seams with visitors, it seems timely to consider how new legislation will change the housing landscape; not just in Edinburgh but across Scotland. Joanna Millar, Legal Director Gilson Gray LLP unpicks the new legislation.

Planning Permission – Is it required? ASSC Legal Opinion

The whole of the City of Edinburgh Council area has been designated as a Short-term Let Control Area for the purposes of Section 26B of the Town and Country Planning (Scotland) Act 1997, coming into effect on 5th September.

Upon the designation taking effect, use of an entire dwelling that is not a principal home, as a short-term let will be a material change of use requiring planning permission.

• 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.

Existing planning rules will apply….. Recent policy from planning officers illustrate a pre-disposition to reject planning permission for tenemental flats, citing a material change of use.

Legal advice obtained by the ASSC on the requirement for planning permission for self-catering properties was supplied by the legal firm Brodies LLP in March 2018. Some of the main points from the legal advice obtained by the ASSC include the statement that:

“…the commercial element (in self-catering use] is broadly similar to a residential property being occupied by a tenant paying rent…The question is therefore whether short stay occupation necessarily has different planning considerations/impacts. Short stay occupation involves people living in the property, just for shorter periods. However, that does not necessarily mean the nature/impacts of the occupation are different.”

The advice goes on to discuss how permanent residents can have different movements depending on a variety of issues, including employment, leisure interests, family circumstances, health. For instance, a family with teenage children might enter and leave the property many times during the day and night. Therefore, the advice maintains that:

“Users of a self-catering property are therefore unlikely to exhibit markedly different characteristics to more permanent residents. Disruptive or anti-social behaviour is just as likely in residential use as self-catering use.”

The advice concludes with the following:

“…reasonable arguments can be made that self-catering use does not involve a material change of use from residential use. That has been the outcome in individual cases decided by appeal reporters/inspectors and upheld by the courts. It is also impliedly supported by the statements in the Scottish Government Circular 4/1998.”

Sources:

[1] For further information on housing issues, please consult: https://www.assc.co.uk/policy/housing-and-short-term-lets-in-scotland-the-facts/

[2] https://www.gov.scot/binaries/content/documents/govscot/publications/impact-assessment/2021/06/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria/documents/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation/govscot%3Adocument/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation.pdf

[3] Parliamentary answer to S6W-02111. Url: https://www.parliament.scot/chamber-and-committees/written-questions-and-answers/question?ref=S6W-02111

[4] Parliamentary answer to S6W-02109. Url: https://www.parliament.scot/chamber-and-committees/written-questions-and-answers/question?ref=S6W-02109

[5] https://goodmove.co.uk/empty-housing-hotspots/

[6] https://www.nrscotland.gov.uk/statistics-and-data/statistics/statistics-by-theme/households/household-estimates/2020

[7] https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf

[8] https://www.gov.scot/publications/housing-statistics-for-scotland-new-house-building/

[9] https://yourviews.parliament.scot/session-5/local-gov-sustainability-covid/consultation/download_public_attachment?sqId=question-2020-06-10-3171498657-publishablefilesubquestion&uuId=866941340