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Category: Short-Term Let Regulations

Short-Term Let Regulations in Scotland

Posted on by Fiona Campbell

Short-Term Let Regulations are coming into force in Scotland.

Context

Tourism is a force for good in Scotland. It makes a major contribution to our country’s GDP, impacts on jobs, spreads wealth across the whole of Scotland; and is a sustainable, innovative and indigenous industry that offers huge potential. Nationally and locally, it benefits our communities.

The ASSC are rightly proud that self-catering has been a mainstay of the Scottish tourism industry for generations and is integral to its success and future vitality. Professional self-caterers are part of local communities across Scotland and have been for many, many years. Their value is demonstrated by the considerable economic contribution: self-catering provides a £867m per annum boost to the Scottish economy, benefiting local communities the length and breadth of Scotland, supporting 23,979 FTE jobs:

We are immensely proud of our businesses, of those we employ, and our record of not only being a fundamental part of Scotland’s world class tourism offering but also of the communities that we live and work in. Given the importance of self-catering to the Scottish tourism industry, which has experienced such a challenging time due to the impact of Covid-19, an appropriate regulatory balance is a necessity, as is a supportive environment to help businesses recover and flourish.

Unfortunately, the Scottish Government has chosen this time to introduce a controversial regulatory framework for short-term lets in Scotland.

Short-Term Let Licensing and Planning Control Areas

The Scottish Government has introduced a licensing regime for short-term lets in Scotland. Anyone looking to grant a short-term let for the first time from 1 October 2022 will need a licence before they do so. Those who are already operating short-term lets before 1 October 2022 must apply for a licence by 1 April 2023 if they wish to continue doing so. It will be an offence punishable by a fine of up to £5,000 for short-term lets granted without a licence.

Every local authority is tasked with setting up a licensing system by 1 October 2022. Existing short-term letting operators should consider the potential planning requirements as well as checking whether their property meets the required licensing standards. For those considering entering the short-term letting market, the additional cost of a licence and potentially planning permission should be taken into account. If buying a property, they should consider what information or evidence the seller might provide to allow short-term letting to continue or indeed begin.

In addition, new planning rules on short-term letting introduce a new power for local authorities to designate the whole or any part of their area as a Control Area. The effect of being in a Control Area is to make use for short-term letting of a whole dwelling house or whole self-contained flat, which is not the home of the host (a secondary letting), a material change of use as a matter of law. Such a secondary letting within a Control Area will always need planning permission as well as a licence.

As yet, there are no confirmed Control Areas but the City of Edinburgh Council has consulted on the whole of the council area being a Control Area and Highland Council are also consulting on whether Badenoch and Strathspey should become one.

Legislation pertaining to Short-Term Lets

It is important to note that these two pieces of legislation are very different, despite the issues being conflated over the last 5 years.  Licensing relates to the safety of an activity, while planning control areas relate to the use of properties.

Association of Scotland’s Self-Caterers

Founded in 1978, the Association of Scotland’s Self-Caterers (ASSC) are the leading source of knowledge on short-term letting and holiday homes in Scotland and are the only trade body representing the interests of the traditional self-catering sector. Self-catering properties have been a longstanding presence in communities for generations, especially in rural communities, and provide an economic boost for local areas and enhance Scotland’s tourist accommodation offering. We represent over 1350 Members, operating tens of thousands of self-catering properties throughout Scotland, from city centre apartments to rural cottages, to lodges and chalets, to castles, all of whom generate £867m per year for the Scottish economy. The ASSC commits its members to maintaining the principles of “quality, integrity, cleanliness, comfort, courtesy and efficiency” and to offering visitors to Scotland consistently high standards within their self-catering properties. The ASSC’s vision is to place our members at the forefront of a professional, vibrant and prosperous Scottish self-catering sector.

The ASSC did not want the form of short-term let licensing that is now on the statute book – a view shared by many stakeholders as well as local authorities in Scotland – and we continue to maintain that it will entail unintended consequences.

However, now that the legislation has been passed by the Scottish Government, and as we move towards the implementation stage and licensing schemes going live across the country, we want local councils to work with us and other relevant tourism and legal stakeholders, to ensure the smoothest possible rollout and to reduce the regulatory burden as much as possible.

In our ASSC manifesto, published prior to the local elections in May Self-Catering: Local, Reliable, Sustainable[1], we highlighted that self-catering can lead the way in providing holiday accommodation that balances the creation of memory-making vacations for our guests while also being a key part of our cities, towns, and villages.

To achieve this, our requests from local government over the next five years were:

  1. To Minimise the Burden of Short-Term Let Licensing: councils should work closely with small business representatives and industry to try and minimise the burden from licensing as much as possible, then carefully monitor its impacts, and not to impose ‘additional conditions’ on already hard-pressed businesses.
  1. To Ensure an Evidence-Base for Short-Term Let Control Areas: now is not the time to further burden self–catering with additional regulations like control areas but if local plans are proposed, they should be underpinned by robust, empirical data.

Whatever happens in terms of the local elections, or how local authorities will implement this legislation, we will aspire to work constructively and collaboratively with our national and local government partners for the benefit of our members, local communities and our industry’s recovery. That’s our pledge to our members and our sector.

[1] https://www.assc.co.uk/policy/local-government-election-manifesto-2022/

Joint Letter on Behalf of the Edinburgh Chamber of Commerce and the Edinburgh Tourism Action Group (ETAG) re Proposed Short-Term Let Legislation

Posted on by Fiona Campbell

Edinburgh Chamber of Commerce and Edinburgh Tourism Action Group (ETAG) have jointly issued a letter to City of Edinburgh Council.

In it, they call for “a level of balance and fairness … to protect Edinburgh’s long established and responsible short term let providers and the necessary diversity they bring to the city’s accommodation offering. Specifically:

  • Responsible short term let providers don’t only make a significant contribution to our critical visitor economy, but our culture and festival sectors by providing affordable and flexible accommodation for artists and performers who take part in the city’s 11 festivals annually.
  • They also provide much needed short term accommodation to people relocating to the city to work or study here, as they transition to more permanent situations.
  • They are used by large corporate businesses who are placing staff in the city on a short term basis, as a cost effective alternative to hotel accommodation.
  • Film companies who need to accommodate their staff whilst working from the new film studios in the city use short term lets.
  • They are also used by local families who need temporary accommodation whilst they carry out insurance or renovation work, families who wish to holiday affordably in the city and would not stay in a hotel, and visiting academics who often travel with their families.

Read the letter: ECC-ETAG Short Term Let Letter April 22

East Lothian Council: Planning Control Area Consultation

Posted on by Fiona Campbell

The ASSC has responded to East Lothian Council’s consultation to “gather opinions from local residents and a wide range of relevant sectors on whether there are particular issues in East Lothian’s communities that could mean one or more Control Areas may be required under the Scottish Government’s new Town and Country Planning (Short-term Let Control Areas) (Scotland) Regulations 2021”.

Read the full response: ASSC Response to East Lothian Council 4.4.22

The ASSC opposes control areas for East Lothian but wishes to put this stance in context, setting out our responsible and proactive regulatory position. First and foremost, the ASSC is not averse to regulation; but we do challenge policies that are pursued while lacking a firm evidence base which will damage the livelihoods of our members and Scotland’s vital tourism industry. Overall, we want to ensure a balanced and proportionate approach for business, tourism and local communities and get a regulatory framework in place that works for all. We will work constructively with all stakeholders, including East Lothian Council, to achieve this crucial objective.

Moreover, we proactively worked with MSPs and the Scottish Government on the short-term let provisions in the Scottish Government’s Planning (Scotland) Act during the Bill’s passage through the Scottish Parliament which will now enable local councils to introduce Control Areas subject to satisfying certain conditions and achieving Ministerial approval. The introduction of Control Areas, in areas of housing stock pressure with a demonstrable link with short-term lets, is in line with the ASSC’s Long-Term Approach to Short-Term Letting Policy, published back in February 2019. This underlines the fact that the industry is in fact supportive of regulations when they are targeted, proportionate and balanced.

However, we believe that there is no evidential basis to pursue control areas in East Lothian Council at the present time. Any proposal to take this forward must present a firm, reliable and robust evidence base to justify it. If the aim is to control the number of short-term lets due to pressures on housing stock, the ASSC maintains that this has to be properly evidenced using robust data and not rely on anecdote or unreliable ‘scrapings’ of data using third-party websites. In addition, the Council would also have to be clear with its policy intention – if it is about housing, how would they assess the ultimate success of their short-term letting policy and what would be the key performance indicators?

The ASSC have previously argued that there is a lack of data showing an empirical link between short-term lets and housing shortages and that a more holistic approach needs to be taken to the issue. Housing challenges are multifaceted and the growth of short-term lets should not be used as a convenient scapegoat for wider policy failures; namely the failure to build more homes or bring empty homes back into use. Thus far, no evidence has been published in Scotland that demonstrates a concrete link between short-term letting and the Scottish housing supply.

We should be mindful of the unintended consequences of using tourist accommodation to ameliorate housing pressures and increase affordable housing to rent or buy. If self-catering businesses were forced to close due to rejected planning applications under a control area, the Council would need to consider whether such properties could actually be deemed as ‘affordable housing’ which local people could easily obtain. One unintended consequence could be an increase in second homes purchased by those outwith the locality – which offers no material benefit to the area – rather than self-catering which benefits local economies through guest spend and footfall in other businesses like hospitality. There is also no guarantee that an owner will either sell the property or make it available on the long-term rental market; they could let it lie empty or use their property as a second home, something which would only benefit the individual owner while damaging the tourism economy in the process.

In terms of the existing evidence, on the basis of the note provided by the Council to accompany the Engagement Exercise:

  • The paper recognises that “the majority of Short Term Lettings operate without any issues”;
  • It shows that short-term lets only form a small proportion of the total number of properties in East Lothian and in the five towns highlighted in the paper;
  • On complaints relating to litter, noise and/or anti-social behaviour, it states that “there is little evidence at the moment to show that short-term let properties are causing these problems”, with only two complaints being received by East Lothian Council between January 2018 and October 2021 relating to STLs; and
  • Finally, on residential/community amenity, it acknowledges that “it is not considered to be a significant issue in East Lothian at the moment”.

This suggests that the introduction of a control area(s) is unnecessary and would wholly disproportionate to any perceived problems associated with short-term lets in East Lothian.

It wouldn’t just be small business owners and local business owners who could be adversely affected by control areas – a regulatory change of this nature would pose significant resourcing implications for East Lothian Council which will need to be properly assessed. The ASSC have engaged East Lothian Council representatives on the separate issue of short-term let licensing who confirmed to us that:

“In particular, we are wrestling with the issue of how the costs of establishing the licensing scheme can be met while we continue to operate in this challenging financial environment. As you have also highlighted, the fee levels for applicants need to reflect the cost of administering the scheme, but, until we have more information regarding this matter and an idea of the number of applications we might expect, we are unable to give any robust estimate of likely fee levels. This is administratively difficult for the Council but potentially much more problematic for owners of short term let properties, who need to make decisions about the future operation and commercial viability of their properties. Whilst we acknowledge that some areas have suffered difficulties as a result of unregulated short term lets, we are particularly anxious to avoid compromising the valued and valuable tourism sector in East Lothian through implementation of a ‘heavy handed’ and, thus, expensive, licensing scheme to no real benefit.”

Having to grapple with a burdensome mandatory licensing scheme is onerous enough without adding to this with planning control areas. Therefore, the ASSC believes the Council must undertake an economic impact assessment if they intend to introduce control areas. Furthermore, at a time when there are severe constraints on local government finance, additional burdens will be placed on planning teams to manage the requirements of any control areas. With the absence of any estimations in the Council’s note, the Financial Memorandum for the Planning (Scotland) Bill estimated that the cost to planning authorities of additional applications resulting from short-term lets would be between £358,207 and £2.7m per year. Given that this was prepared in 2017, the costs may have increased further.

Moreover, research carried out by the Royal Town Planning Institute (RTPI) in connection with the implementation of the Planning (Scotland) Act 2019 estimated the costs of a planning authority designating all or part of its area as a short-term let control area between £640,710 (lower estimate) and £14,756,800 (higher estimate). The RTPI also commented that the “increase in demand for planners comes at a time when there is a diminishing resource base with planning authorities’ budgets decreased in real terms by 40.8% and staff numbers cut by 25.7% since 2009.” Likewise, the Law Society of Scotland warned that local authorities may not be ready from a resourcing perspective: “There are unlikely to be resources in place at present in local authority licensing or planning departments to cover such additional and in certain areas, extensive work.”

Overall, coupled with the mandatory licensing scheme introduced by the Scottish Government, a control area(s) could not come at a more inopportune moment for the self-catering industry which is still trying to recover from the devasting impact of Covid-19 on the tourism sector. The cumulative impact of this would entail a negative impact for operators, potential visitors and the local economy that tourism supports. Indeed, it comes at a time where our tourism industry should be supported by local and national government for a sustainable recovery, especially when so many businesses remain in survival mode.

In conclusion, tourism is a mainstay of the Scottish economy; and self-catering is hugely important to Scottish tourism in terms of jobs, revenue, and world-class experiences offered to guests – including in East Lothian. To be such an essential part of Scotland’s tourism mix is even more remarkable for our sector when most self-caterers operate small or micro businesses. The recovery of Scottish tourism will benefit small businesses, while responsible and sustainable tourism can help communities to recover too. East Lothian Council needs to play its part by helping small businesses like self-catering ensure a sustainable recovery by providing a supportive environment and not progressing with a control area(s).

References

The ASSC have drawn upon the following sources for its submission and hope that the Council finds them useful for informing their view on the possible introduction of a control area. We would be happy to meet with Council representatives to discuss this in further detail.