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.

Short-term lets. Planning control areas. A lack of affordable housing. What does this mean for someone who runs a self-catering unit or wants somewhere to rent in Scotland?

Short-term letting is renting a property or part of a property for a brief period of time, often for a holiday or a business trip. It’s not a tenancy. The term covers the rent of a whole property or renting a room in someone’s home, which could be in a self-catering unit, B&B, hotel, guest house, glamping pod or field of yurts, or just a spare room in someone’s flat.

Planning Control Areas will impact short-term lets.

But first, some background. The Scottish Government recently introduced legislation which permits councils in Scotland to restrict planning consent to new and existing short-term let operators.

Each council has its own planning policy, and some already have restrictions on the areas and types of property that can be used for short-term let. A planning control area restricts that further and is aimed at reducing entire property short-term lets in a particular area, or type of premises – eg. tenement or a semi-detached property.

Councils which wish to pursue a planning control area must consult with the general public. If after consultation they decide to go ahead, they apply to the Scottish Government for approval.

The City of Edinburgh Council has gone through these steps and in early August received permission to proceed.

So, what does this mean for those wishing to rent or operate short-term lets in the Edinburgh area?

If the property is in a planning control area, operators must have planning permission before they can be granted a licence. The introduction of a planning control area in the city of Edinburgh assumes refusal of planning permission to short-term lets in a tenement property – unless the property has its own main door.

This decision will affect a substantial number of operators who will now be unable to get planning permission – and thereby a licence- and will be forced stop operating. This reduces the number of short-term lets available.

The decision makers at the council believe this will increase properties available for people to rent long-term or to buy as their main home, and will addresses the lack of affordable housing.

But many operators disagree.

Their view is that a number of these properties will not be sold on the market or converted to long-term tenant lets but instead will become second homes, used only by friends and family, empty for much of the year.

The Association of Scotland’s Self-Caterers highlights that there are 47,333 empty houses in Scotland, of which 7,152 are in Edinburgh. There are 1,404 self-catering units on non-domestic rates in Edinburgh, and numbers of short-term lets oft quoted are from ‘scraped’ data in 2019 and no longer accurate.

To put the above into context, there are more than 250,000 dwellings in Edinburgh. The level of self-catering activity in Scotland is not of a scale sufficient to affect housing supply issues in Scotland.

Current operators will also need planning approval unless their short-term rental property has been operating for more than ten years. If this is the case, in most cases a ‘certificate of lawfulness’ can be applied for. In these situations no further planning permission for that specific type of operation is needed.

What about licensing?

Now let’s turn to the licensing aspect.

The second piece of legislation introduced by the Scottish Government is a licensing scheme whereby anyone wanting to operate a short-term let must have a licence.

Those operating by 1 October this year can continue to do so, but they must apply for a licence before 1 April 2023, and have one in place by April 2024.

The new licensing scheme also has the ability to introduce further restrictions via policy considerations, as each council must have a short-term let licensing policy.

Councils are expected to have to be ready to accept applications from 1 October. The timescale is incredibly tight and the six-month window for applications – from October 2022 to end of March 2023 – is causing concern.

If you have any questions about any of the topics discussed in this blog, get in touch with our Head of Licensing, Joanna Miller either by email: jmillar@gilsongray.co.uk or by phone: 0141 370 8116.