Short-term lets (not?)

Since our 2018 blog on short-term lets, the Scottish Government has published its report Research into the impact of short-term lets on communities across Scotland (the Report) and section 17 of the new Planning (Scotland) Act 2019 (the Act) will equip local authorities with the power to introduce Short-Term Let Control Areas where they decide that this is in the interests of local communities.  The aim is for the regulations to be in place by spring 2021.  

The Act does not expressly define what a short-term let is but private residential tenancies under section 1 of the Private Housing (Tenancies) (Scotland) Act 2016 and tenancies of a dwellinghouse (or part of it) where all or part of the dwellinghouse is the only or principal home of the landlord or occupier are held not to constitute short-term lets. 

The Report indicated that although there were just under 32,000 active Airbnb listing in Scotland as of May 2019 (a three-fold increase since 2016), approximately half of these listings were in either the City of Edinburgh (CEC) (31%) or Highland Council (19) areas. 

Control areas will be optional.  This will not be a blanket approach across the country.  Instead, certain hotspot areas, such as Edinburgh and Skye (Highland Council), can designate all or part of their areas as control areas. Planning permission will always be required where a property is to be used for a short-term let within a control area.

The current situation is that where it can be shown that there has been a material change of use from a residential property to short-term let accommodation, planning permission is required.  This is on a case-by-case basis and assessed on (i) the character of the new use and the wider area; (ii) the size of the property; (iii) the pattern of activity associated with the use, including the number of occupants, the period of use, issues of noise, disturbance and parking demand; and (iv) the nature and character of any services provided. 

A recent (successful) appeal against the refusal of a certificate of lawful use application by CEC can illustrate the approaches.  The application was submitted on the basis that the existing use for short term residential letting, ongoing since around May 2019, was not a material change of use and consequently did not require planning permission.  The property in question was a two bedroom flat on the ground and basement floors of a four storey tenement building.  The property had its own private access, no services were provided to the occupants and there was a mix of uses within the vicinity of the property including a kebab shop, hairdresser and a financial services business.   Based on the above criteria, the Scottish Government Reporter concluded that the existing use was in keeping with the nature and size of the property and that there was no significant disturbance or impact from the use therefore a certificate should be granted. 

If, going forward however, the property fell in a control area, planning permission would automatically be required.  Same property.  Different result.  At least there would be certainty in knowing that planning permission would be required for properties falling within control areas. 

Local authorities already have the tools to combat short-term lets.  If CEC were to designate only the city centre ward (2,710 active Airbnb listings per the Report, more than the whole of Glasgow) as a control area, other wards within its jurisdiction that are not designated as control areas would still require to be dealt with on a case-by-case assessment.  When considering council resources alongside this approach, an authority may be unable to fight this battle on two fronts.  Managing the influx of a massive number of planning applications could prove catastrophic to planning departments while still having to deal with cases outwith control areas on an individual basis.  This may encourage planning authorities to designate all of their area as a control area or from a budgetary/resource perspective, not to implement a control area at all. 

Following the introduction of control areas, on 8 January 2020 the Scottish Government announced further powers for local authorities to regulate short-term lets by introducing a licensing scheme under the Civic Government (Scotland) Act 1982 also in force from spring 2021.    It will become a criminal offence to operate a property as a short-term let without a licence.  The scheme will include a new mandatory safety requirement and provide councils with the discretion to apply further conditions to address the concerns of local residents.  A new licensing scheme will present similar issues to the new planning controls – namely that of a lack of council resources. 

In addition to the above schemes, there is a commitment from Scottish Ministers to consider the taxation of short-term lets to compliment the Transient Visitor Levy Bill to be introduced later this Parliament. 

These new government measures are an attempt to balance the interests of local communities with the interests of visitors.   There are no overnight solutions for these issues.  Uncertainty remains for the foreseeable future for short-term lets in Scotland. 

Subscribe and stay updated
Receive our latest blog posts by email.
Gordon Clark

About Gordon Clark