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ASSC Briefing: Survey Measuring the Unintended Consequences of Short-Term Let Licensing to Self-Catering in Scotland

Posted on September 29, 2021April 10, 2025 by Fiona Campbell

Context and Background

The Scottish Government intend to lay their revised short-term let licensing scheme regulations before parliament in November 2021. They are currently analysing the responses from stakeholders to their third consultation on short-term lets.
As part of this regulatory discussion, and in order to gain further insights and additional data, the Association of Scotland’s Self-Caterers (ASSC) conducted a snap survey of operators on 24^th September to gauge some of the unintended consequences of licensing to the self-catering industry.
In just 72 hours, the ASSC gathered 668 responses from self-caterers across Scotland and the main points are set out below. You can read the survey results in full here: Measuring the Unintended Consequences of Short-Term Let Licensing to Self-Catering in Scotland
Instead of a disproportionate licensing scheme, the Scottish Government should back legitimate professional businesses and our renowned tourism sector at this critical stage of Covid recovery, allowing visitors to benefit from our unique hospitality and fantastic range of accommodation.
To this end, the ASSC have presented balanced, proportionate and fair proposals which would provide an exemption from licensing for registered accommodation, which would help protect Scotland’s £867m self-catering industry while also secure the Scottish Government’s policy objectives.

Summary of Results

Scottish Government Ministers consistently claim licensing would not be onerous. As recently as last week, the Cabinet Secretary for Housing Shona Robison told MSPs their licensing plans “will not be onerous for those who provide short-term lets.”[1]
However, this is clearly not the view of those who work in the sector as shown by the ASSC’s survey, nor is it the view of industry stakeholders.
If the Scottish Government introduce licensing as drafted, 92% of the industry consider the licensing scheme burdensome, whilst 88% consider it onerous. Over half of operators would remove their listing from holiday accommodation and close their business as a result.

In addition, the survey highlighted that:

71% said the purpose of the property is specifically for a tourism accommodation business, with 82% on non-domestic rates.
12% said it was part of their primary residence, 30% said they would leave the property empty, while only 20% would sell it. Moreover, 72% said that if they were to sell their property, it would not be available for affordable housing
A staggering 92% have concerns about the unknown cost of a licence application in addition to existing health and safety compliance.
When asked about the mental implications of the proposed licensing scheme to self-catering operators, their family or business colleagues, 82% said the proposed scheme was causing them concern or distress.
89% of operators said they feel uncomfortable or distressed about the uncertainty of having to apply for a licence every 3 years.

Responding to the survey, Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, commented:

“This survey highlights the apprehension of self-caterers throughout Scotland at the prospect of short-term let licensing. Contrary to repeated assertions from the Scottish Government that their proposals will not be onerous, small businesses disagree with 92% stating that it will burdensome.

The findings also demonstrate some of the unintended consequences which will arise as a consequence of this legislation. Over half of operators would remove their property from holiday accommodation and close their business, thereby damaging Scotland’s tourism accommodation offering.

Rather than proceeding with a disproportionate licensing scheme which will hit small businesses who benefit their local economy, we need to save jobs and protect livelihoods at this critical phase of Covid-19 recovery with proportionate and targeted regulations. Our exemption proposal for registered accommodation does precisely that by ensuring an appropriate regulatory balance.”

Read the survey results: ASSC Measuring the Unintended Consequences of Short-Term Let Licensing to Self-Catering in Scotland

Professionalism within Self-Catering and B&Bs in Scotland

Related to our survey on short-term let licensing, earlier in this month, the ASSC also ran an online survey to assess levels of professionalism within the tourism accommodation sector and compliance with existing regulations. Full details can be found here.

Main Points

In just 72 hours, the ASSC gathered 1484 responsesfrom accommodation businesses across Scotland, which includes traditional self-catering, bed and breakfasts, guest houses and small hotels plus, agri-tourism businesses, caravans and shepherd’s huts and other glamping accommodation.
On the whole, small tourism accommodation businesses across Scotland are operating at a professional level: three quarters (1089 respondents – 74%) consider themselves to be professional operators.
The professional standing on respondents is further justified as: 97% have public liability insurance; 67% are ASSC members; and 61% have their own website.
The majority of survey respondents (80%) operate self-catering businesses. Of the 1185 self-catering operators responded:
Almost three quarters (74%) consider themselves “professional operators
90% confirmed that their business meets the definition of a self-catering property as defined in The Council Tax (Dwellings and Part Residential Subjects) (Scotland) Regulations 1992. In addition, 84% pay non-domestic rates and let out their properties for more than 140 days per annum. 92% are occupied more than 70 days. These are both key indicators that they are operating as a business not just to generate additional income.
97% have public liability business insurance.
Of the 338 B&B/Guest House operators responded, 81% consider themselves to be professional operators and 80% state the accommodation business is their primary source of income.
45% are on the non-domestic rates roll while 54% pay council tax
Of those that offer food, 90% can confirm that the business is registered and has been passed by the local authority’s Food Hygiene Information Scheme.
74% have a listing on VisitScotland
30% market their property through Airbnb amongst other platforms.

Conclusion

Self-catering properties, B&Bs and guest houses have been a longstanding presence in communities for generations, especially in rural/remote communities, and provide an economic boost for local areas and enhance Scotland’s tourist accommodation offering.
Latest figures show there are 17,794 self-catering units on Non-Domestic Rates. These properties generate: 4 million visitor nights per year; £867.1m total visitor spend; and support 23,979 FTE jobs according to an economic impact assessment from Frontline Consultants.
Such self-catering properties are legitimate, bona fide businesses whose owners depend on the money generated for their livelihood. This is entirely separate from the ‘homesharing’ concept, or those amateur operators who utilise online marketing platforms but are not subject to the same levels of existing regulation.
Despite their valuable contribution, professional self-caterers and B&B owners will still be captured by the onerous ‘revised’ Scottish Government regulations, devised to respond to concerns predominantly found in urban areas over party-flats/amateur operators utilising marketing platforms.
As our survey has shown, over half of self-catering operators will quit should the current licensing plans come into force. With expensive licensing fees of £1,000+ according to the Society of Local Authority Lawyers & Administrators, it will entail a materially negative impact for small business at a time when they should be supported for a sustainable recovery.
Instead of hitting small tourism businesses, policymakers should consider the ASSC’s exemption proposal for registered accommodation.

[1] Scottish Parliament, General Questions, 23 September 2021. Url: https://archive2021.parliament.scot/parliamentarybusiness/report.aspx?r=13316

What our members say:

I love the tourism sector. I take huge pride in doing all that I can to ensure guests experience a warm welcome and enjoy a relaxing holiday in comfortable surroundings… somewhere to call home while they explore the area and contribute greatly to the local economy, whether it be cafes, restaurants, boat tours, historic attractions, weavers, distilleries, artists. I love being part of this sector and helping to promote local businesses. Without this business I don’t know what I will do. I will obviously lose my income (as will my housekeeper and manager, and the local laundry will lose a client). I want to continue offering quality accommodation and to continue welcoming my many returning guests as well as getting to know new guests…but I am not sure if my mental health can stand the uncertainty of this bizarre licensing scheme…how can we take bookings and tell guests we might not be able to honour them if our licences are not renewed? I am feeling nauseous and anxious as I write this…so I guess that describes how this is going to affect me…
It’s a Burach. A mashup of licensing, planning, and lurid tabloid headlines. It won’t work. Even one of the original proponents, Andy Wightman could not support it when it came before the Committee. He could recognise a car crash when he saw it. Scrap it, and allow the self-catering sector to recover from the terrible year we have just had. Don’t kick us when we are already on our knees.

Local Government Committee’s survey on the Scottish Government’s proposed STL regulations

Posted on September 27, 2021April 10, 2025 by Fiona Campbell

This morning, the Scottish Parliament’s Local Government Committee has released details of a short survey on the Scottish Government’s proposed STL regulations and the changes they have made to their licensing scheme.

The Local Government, Housing and Planning Committee wants your views on plans to regulate short-term lets.

If approved, the new laws would see the introduction of a licensing scheme for short-term lets. The Scottish Government suggests that the new laws would:

make sure short-term lets are safe,
help with issues faced by neighbours from short-terms lets, and
help councils know and understand what is happening in their areas about the provision of short-term lets.

Ahead of the new laws being introduced later this year, the Committee wants to hear from people across Scotland about whether the proposed laws will achieve what they set out to do.

Plans to regulate short-term lets in Scotland are expected to be considered in November and December.

Further details can be accessed here: https://www.parliament.scot/chamber-and-committees/committees/current-and-previous-committees/session-6-local-government-housing-and-planning/business-items/short-term-lets-regulations

The link to the survey can be found here: https://yourviews.parliament.scot/spice/licensing-of-short-term-lets/consultation/intro/

The deadline for this is 29 October.

There is agreement from nearly all stakeholders about the need for some form of regulation, just not on what form this should take. Despite the years of discussion, there is still uncertainty about what the Scottish Government are seeking to achieve through their legislation. With the government introducing policies like overprovision into the legislation, this raises some fundamental questions about what they want to achieve through their licensing regulations which were meant to be about health and safety:

If it is about health and safety – this can be addressed through the ASSC’s exemption proposal which is a balanced and proportionate approach.
If it is about anti-social behaviour – enforce existing legislation such as the Antisocial Behaviour Notices (Houses Used for Holiday Purposes) (Scotland) Order 2011.
Ifi t is about housing – introduce short-term let control zones using Planning Act regulations and empirical data to underpin any proposals.

It is a short survey, but it is critical that anyone that has anything to do with Short-Term Lets responds: operators / agencies / cleaners / supply chain / as well people who stay in short-term let properties for business or pleasure.

Could we ask you, once again, for your support in responding to this survey. This really could be the last chance to get the Scottish Government to revisit the legislation as proposed, which constitutes the biggest ever threat to our sector.

The Local Government Committee can be contacted here.

Their Twitter handle is @SP_LocalGov

Island Communities Impact Assessment

Posted on September 23, 2021April 10, 2025 by Fiona Campbell

ASSC Comments on the Scottish Government’s Island Communities Impact Assessment on Proposals for a Licensing Scheme and Planning Control Areas for Short-Term Lets:

The Scottish Government undertook an Island Communities Impact Assessment on its licensing order as highlighted by the following recent parliamentary question.

S6W-02556: Donald Cameron, Highlands and Islands, Scottish Conservative and Unionist Party, Date Lodged: 30/08/2021 R

To ask the Scottish Government whether it has prepared an Island Communities Impact Assessment in relation to its proposed short-term lets Licensing Order, and, if so, whether it will publish it.

Answered by Shona Robison: An Island Communities Impact Assessment (ICIA) was published on 10 December 2020 in our 2020 consultation report on proposals for a licensing scheme and planning control areas for short-term lets in Scotland. The ICIA can be found at: Short-term lets – licensing scheme and planning control areas: consultation analysis – gov.scot (www.gov.scot)

The ASSC believe this to be a tokenistic piece of work in order to tick the box to say it was completed as required and was not a thorough and robust analysis. As is regularly the case with island impact assessments, despite the identified negative impacts, these are not given due consideration and the conclusion is that the legislation should proceed regardless.
While the Scottish Government’s proposals are likely to have an impact on island areas, the Scottish Government have not updated the ICIA to reflect its revised Licensing Order and is instead relying on the paper published in December 2020.
It is relevant to note that the footnotes to the ‘Short-Term Lets – licensing scheme and planning control areas: consultation analysis’ states that: “housing shortages in island locations could be down to a number of factors beyond short-term lets, including: second homes, a smaller private rented sector than in urban areas and the challenge of trying to match need and demand in smaller communities.”[1] If the Scottish Government recognises this in their analysis of the consultation responses, why is this not reflected in the ICIA and why does the Scottish Government continue to suggest that housing shortages are the basis for the rationale of implementing short-term let licensing when it was meant to be ensuring health and safety?
There is no evidence to indicate that shrinking the short-term let sector will release properties for local people onto either the long-term let rental market or the property market on the islands. A far more holistic approach is required for island economic growth, to rebalance and diversify the island economies, to provide increased connectivity, increased job opportunities and wealth generation.
The Private Residential Tenancy and the security of tenure that it gives tenants is a huge disincentive to landlords, so too ever stricter building regulation requirements for long-term let properties. Affordable housing is also largely out of the reach of single people and families. Affordable housing requires mortgages of between £130k and £200k meaning in reality it is not affordable. Thresholds for the Scottish Government’s shared equity ownership schemes are now set too low, meaning that this scheme does not function to move lower priced properties into the realm of possible ownership for any individuals or families, particularly in areas such as Skye which has seen a very significant post COVID property boom and marked inflation in house prices. Furthermore, those looking to access the shared ownership equity scheme are required to consider homes across the whole of the local authority area. The Highland Council area is huge, making the latter an impracticable proposition, particularly for those with children.
Progress on housebuilding is not fast enough. For instance, the Scottish Government have only spent half of their £25m Rural Housing Fund which aims to build affordable homes in rural areas[2]. A real island impact assessment must consider prima facie failed island housing policy and the woefully slow build of so-called affordable homes.
The ICIA has made no attempt to properly assess the financial and commercial impact of licensing on short term let operators in Island communities. Scant regard is given to the real challenges and substantial additional costs of operating successfully in remote areas of the Highlands and particularly Islands. No meaningful or accurate attempt has been made to quantify the additional costs faced in the Islands. The only suggestion that the Scottish Government seems able to offer is that small short-term let businesses can pass on increased operational costs from licensing to the consumer, thereby adding to the considerable inflationary pressures arising from Brexit and emergence from the pandemic.

Points in the ICIA to note:

The ICIA states:

13.13. Positive impacts include:

a) Short-term lets support the tourism and visitor economy, which can be vital to island communities through:

(i) income received by hosts,

(ii) support for local businesses such as restaurants and shops by short-term let guests, and

(iii) employment opportunities, such as cleaning and maintenance.

b) Short-term lets support the wider rural economy through providing accommodation for seasonal workers.

c) A number of hosts in rural and island areas noted that running a second property (or properties) as a short-term let provided them with full-time employment and allowed them to sustain their position in the community. They noted that alternative employment opportunities were often limited.

This point is critical given that a large number of islanders are resident ‘portfolio workers’ and the reduction in short-term let capacity via overprovision places one of the sources of income at risk.

13.14. Tourism-related enterprises are over-represented relative to the national average in many rural areas: for instance, Argyll & Bute, and Highland, have the highest proportion of tourism businesses in Scotland as a share of their business sector overall[20].

13.15. Negative impacts included:

a) Reduced availability of residential housing – particularly in areas where there are high concentrations of short-term lets and/or second homes. We have heard concerns about people being unable to take up jobs in certain locations, including Skye and the Western Isles, due to lack of available housing[21].

Policymakers should not use holiday accommodation as a means to solve housing challenges in Scotland, instead focusing on building more affordable homes and tackling the scourge of empty properties. In terms of the latter, there are 2595 empty homes in the Highlands.[3]
Any short-term let regulations taken forward, either at a national or local level, need to be informed by robust empirical data. Scraped data from online platforms can lead to misleading conclusions about the nature of the short-term letting market. The ICIA repeats some of the research that utilises unreliable scraped data which will give an inaccurate picture of the current situation in island communities.
Any housing issues in relation to short-term lets should be addressed by the Planning Act 2019 – through the introduction of control zones underpinned by robust quantitative data – and should not play a part in the licensing proposals which are meant to focus on health and safety.
Small businesses like self-catering, present in communities for decades, should not be used as a convenient scapegoat for wider failures in housing policy.
Operators have stated that if their licence is refused or revoked, they will simply remove their property from the market, resulting in fewer guests, lower income for the onward supply chain and other tourism businesses.

b) Increased strain on local public services.

c) Negative impacts on communities’ quality of life, for example due to noise and anti-social behaviour. The majority of noise and anti-social behaviour concerns related to urban areas, and tenement or flatted dwellings where neighbours live in close proximity. We are also aware that noise and anti-social behaviour can be an issue in rural and island areas, particularly from larger ‘party mansion’ type properties.

There is no empirical to suggest that this is a fact. In 2021, the ASSC conducted FOI requests of each local authority in Scotland about the reported incidences of anti-social behaviour attributed to holiday lets from 2018 to 2021[4], as well as making a comparison with ASB in other types of housing tenure. This demonstrated that complaints against holiday lets remain extremely rare in many parts of Scotland, especially in rural areas, and these figures are a drop in the ocean compared to ASB complaints against other housing tenures.
The FOIs also showed that local councils are not using the Antisocial Behaviour Notices (Houses Used for Holiday Purposes) (Scotland) Order 2011 in response to the limited number of complaints against holiday lets, a power which the former Minister for Housing Kevin Stewart described as “quite comprehensive powers to deal with antisocial behaviour and noise nuisance”, before noting that “I expect them to use those powers effectively…I challenge local authorities to consider using it [Order 2011] and other antisocial behaviour powers, as well as the powers in relation to noise and environmental health that are currently at their disposal.”[5]
There is no data on the number of ‘party houses’ on the islands, nor a definition of such a premises.
Tourism is one of the main segments of island economy and one of the few growing segments. If tourism accommodation capacity is reduced, where will the guests be displaced to, given a lack of hotels or hostels. There is a concern that they will be forced to stay elsewhere, or islands will become inundated by motorhomes and campervans.
It is a leap of faith to believe that these houses, if withdrawn from the short-term let market, will be filled up with people flocking back to the islands, or that they will be affordable to either rent or purchase.
There is a population crisis on many of the islands. This will not be helped by constricting one of the economic growth engines. In general terms, around the world, an increase in economic activity drives an increased population, whilst and the reverse drives the reverse.

13.27. Our proposals for regulation are likely to have an effect on island communities which are significantly different from its effect on other communities (including other island communities).

We commend an understanding that each island is different and subsequently has different needs and issues.

13.30. Island communities may face increased costs in order to comply with the requirements of our licensing proposals. This may be through higher licence fees than urban areas due to rurality and less opportunity for economies of scale in many areas;

This is a significant concern. The cost of complying with the mandatory conditions is already considerably higher than central belt / urban areas, and operators often struggle to secure providers to check compliance (private water supplies, Food Safety, EPCs etc). This is before any licence fee.

13.32. The cost of licence fees will be set by local authorities at a level to cover the costs they incur in setting up and running the licensing scheme. This is already the case for existing civic licence schemes, as well as HMO licensing.

Giving local authorities carte blanche to set fees is a real concern. Costs to island based local authorities are higher than the mainland, and this will have to be passed on to the licence holder to reflect the added administration. Local authorities are under extreme financial and capacity pressures as a result of austerity compounded by the Covid-19 pandemic. Concerns raised by local authorities including Highland and Argyll & Bute have been dismissed or disregarded[6].

13.41. A number of stakeholders have asked how we will ensure our legislation accounts for the distinct needs of different islands. For example, they noted that Arran and Skye have housing pressures for workers due to high concentrations of short-term lets and second homes, whereas other islands do not.

There is no empirical evidence to back this up and no identification of the stakeholders who have made this assumption. While there are undeniable issues with housing, there is no evidence that this is driven by short-term lets. There are many second homes across all the islands, which are not let out and provide no benefit to the local economy. There are also many more empty homes than short-term lets.

13.51. The process of developing our regulatory proposals for short-term lets involved extensive engagement with individuals and organisations from communities across Scotland, including island communities.

The ASSC’s CEO Fiona Campbell attended almost every consultation meeting in 2020, across the length and breadth of Scotland. The meetings on Arran and Skye were attended by a mere handful of people, which does not constitute ‘extensive engagement’. The 2019 research was carried out by a company focused on affordable housing. It was heavily weighted and only involved consulting with 5 professional self-caterers. This was only carried out under duress. The results were a foregone conclusion.

13.56. We consider that the legislation is appropriate for the whole of Scotland, including island communities, and offers considerable flexibility to local authorities on how it is implemented. We intend to work with local authorities, not least in the preparation of guidance, as they work towards implementation so that we can facilitate the sharing of ideas and best practice. We hope this will be of particular value to island local authorities and local authorities with island communities.

Representatives from SOLAR and local authorities have been ignored on the Scottish Government’s Stakeholder Working Group in terms of their concerns regarding the draft legislation, but also the guidance. This statement is meaningless, deceptive and duplicitous.

Footnotes

[1] Scottish Government, Consultation report on proposals for a licensing scheme and planning control areas for short-term lets in Scotland, p78. Url: https://www.gov.scot/binaries/content/documents/govscot/publications/consultation-analysis/2020/12/short-term-lets-licensing-scheme-planning-control-areas-consultation-analysis/documents/consultation-report-proposals-licensing-scheme-planning-control-areas-short-term-lets-scotland/consultation-report-proposals-licensing-scheme-planning-control-areas-short-term-lets-scotland/govscot%3Adocument/consultation-report-proposals-licensing-scheme-planning-control-areas-short-term-lets-scotland.pdf

[2] https://www.thecourier.co.uk/fp/politics/scottish-politics/2493715/snp-ministers-under-fire-over-failure-to-spend-25-million-rural-housing-fund/

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

[4] More details about the FOIs from the local authorities in Scotland is available on request from the ASSC.

[5] See: https://www.parliament.scot/api/sitecore/CustomMedia/OfficialReport?meetingId=11177

[6] https://www.assc.co.uk/policy/the-financial-impact-of-short-term-let-licensing-and-planning-controls-on-scottish-local-authorities/