Short-term lets: business and regulatory impact assessment
Business and regulatory impact assessment (BRIA) relating to the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2021 (“the Licensing Order”) and the Town And Country Planning (Short-Term Let Control Areas) (Scotland) Regulations 2021 (“the Control Area Regulations”).
B: Purpose and intended effect
B1.1 Background: trends in the short-term lets sector
5. Since short-term lets as a category have not previously been subject to regulation, there are no official statistics on the size of the sector. However, there are a variety of data sources which can provide indirect evidence of how the sector has evolved in recent years, particularly with the growing prevalence of on-line platforms.
6. One source of data is self-catering, bed and breakfast (B&B) and guest house accommodation registered on the Non-Domestic Rates (NDR) valuation roll. It is important to note that this only covers a subset of the short-term lets market. This is because self-catering accommodation which is entered on the NDR roll is classified as premises which are not the sole or main residence of any person, and which are made available for let on a commercial basis for an aggregate of at least 140 days in the financial year; if premises are made available for a shorter period they should be entered on the council tax valuation roll[2]. With respect to B&B accommodation, if the premises are the sole or main residence of a person, and are made available for letting to no more than six persons a nights, then they should be entered on the council tax roll regardless of the period for which they are let[3].
7. Over 1,400 small accommodation providers on the council tax roll had received COVID-19 grant support through the Small Accommodation Providers Paying Council Tax Fund by late-April 2021. It should be noted that this only applied where the accommodation was a primary source of income for the host or operator (see paragraph 186). It does not capture short-term let accommodation on the council tax roll which provided a limited supplement to the income of the host or operator.
8. Furthermore, the picture with regard to unconventional accommodation is complex, with varying categories on the NDR roll for units or premises comprising a collection of units[4]. For this reason, we do not consider unconventional accommodation in detail in this section.
Source: Scottish Government analysis of NDR valuation roll data.
9. As Figure 1 and Table 2 show, there has been a significant growth in the number of self-catering premises which are registered on the NDR roll, rising from 9,555 in April 2010 to 17,810 in April 2021, an 86% increase over this eleven-year period. There has also been an increase, albeit smaller, in the number of B&B/Guest house premises registered on the NDR roll, rising from 1,480 in April 2010 to 1,805 in April 2021, a 22% increase. The combined total of self-catering and B&B/Guest house premises registered on the NDR roll rose from 11,035 in April 2010 to 19,615 in April 2021, a cumulative increase of 78%. Because the previous use of premises is not recorded on the NDR roll, it is not possible to disaggregate the extent to which this growth is due to change in use from domestic uses, other types of non-domestic use, or to the premises being new.
10. Table 1 shows the top five areas for self-catering, B&B and Guest house accommodation on the NDR roll as at 1 April 2021, while Table 2 shows how much these categories have grown since 1 April 2010. The growth in self-catering properties in Edinburgh particularly stands out, with the number almost tripling. However, there has also been significant growth in other local authorities which have high concentrations of short-term let premises, including predominantly rural local authorities.
| Location | Self-catering | B&B/Guest house | Total | As share of Scotland |
|---|---|---|---|---|
| Scotland | 17,810 | 1,805 | 19,615 | 100% |
| Highland | 4,885 | 390 | 5,275 | 27% |
| Argyll & Bute | 2,265 | 175 | 2,440 | 12% |
| Edinburgh | 1,515 | 215 | 1,730 | 9% |
| Dumfries & Galloway | 1,385 | 75 | 1,460 | 7% |
| Perth & Kinross | 1,095 | 90 | 1,185 | 6% |
Source: Scottish Government analysis of NDR valuation roll data.
| Self-catering accommodation | B&B/Guest house | Total | |
|---|---|---|---|
| Scotland | 86% | 22% | 78% |
| Highland | 70% | 39% | 67% |
| Argyll & Bute | 72% | 9% | 65% |
| Edinburgh | 191% | -14% | 125% |
| Dumfries & Galloway | 54% | 25% | 52% |
| Perth & Kinross | 83% | 6% | 73% |
Source: Scottish Government analysis of NDR valuation roll data.
11. Over the last decade or so, there has been rapid growth in the use of online platforms as a marketing route for short-term lets. For example, Airbnb, which was founded in 2008, had 21,900 active listings in Scotland by 2016-17[5], increasing to 31,000 by 2018[6] and 35,000 by 1 January 2019[7]. (Note that Airbnb is the dominant platform offering short-term lets in Scotland, but is not the only one.)
12. Listings on online platforms will relate to premises on the NDR roll, as well as premises registered for council tax. Table 3 shows, for Airbnb hosts, a breakdown by the number of nights for which a listing is booked as at 1 January 2019. Around three-quarters of Airbnb listings have been booked for a total period of 120 days or fewer during the year. This helps to explain why the number of listings on Airbnb significantly exceeds self-catering, B&B and Guest house premises on the NDR roll, as it is likely that many of the properties listed on Airbnb will be on the council tax roll. Another factor may be the inclusion of some unconventional accommodation, or accommodation other than in houses, in the Airbnb listings.
| Number of nights | As % of all listings |
|---|---|
| 1 – 30 | 40% |
| 31 – 60 | 17% |
| 61 – 90 | 11% |
| 91 – 120 | 8% |
| 121 – 180 | 11% |
| 181+ | 12% |
Source: Page 5 of Airbnb submission to Scottish Government 2019 consultation on short-term lets.
13. Table 4 provides a breakdown of the top four areas in Scotland (in some cases at a more disaggregated level than local authority) listed on Airbnb as at 1 January 2019. While there is overlap in terms of key tourist areas, listings on Airbnb are more weighted to urban areas than short-term let premises on the NDR roll (compare Table 1).
| Location | Listings | As share of Scotland |
|---|---|---|
| Scotland | 35,000 | 100% |
| Edinburgh | 13,200 | 38% |
| Glasgow | 3,800 | 11% |
| Inverness | 1,300 | 4% |
| Isle of Skye | 1,000 | 3% |
Source: Page 5 of Airbnb submission to Scottish Government 2019 consultation on short-term lets.
14. Table 5 shows a breakdown by the types of accommodation for listings on Airbnb. It is important to note that a listing for an entire home encompasses secondary letting and home letting. In home letting, hosts let out their own home and this might only be for short periods during the year. It is also important to note that listings do not always equate to a single property. For example, somebody sharing two rooms in their primary home on Airbnb may list the rooms separately.
| Airbnb | |
|---|---|
| Entire homes | 63% |
| Private rooms | 36% |
| Shared rooms | 1% |
Source: Page 5 of Airbnb submission to Scottish Government 2019 consultation on short-term lets.
15. It is worth placing these trends relating to short-term lets in the wider Scottish tourism context. Figure 2, which is based on data from surveys of overnight travellers (the Great Britain Travel Survey for domestic travellers and the International Passenger Survey for international passengers), shows that the total number of visits and nights spent in Scotland was relatively steady following the economic recession in 2009. However, from 2016 to 2019[8] there appears to have been a notable increase in the number of visits and nights in Scotland, driven by an increase in international travellers.
Source: GB Travel Survey and International Passenger Survey. Expenditure adjusted to 2019 prices using the GDP deflator.
16. Figure 3 and Table 6 illustrate that much of this growth has taken place in Edinburgh, with the annual growth rate in nights over the period 2011 to 2019 averaging 7.0% in Edinburgh compared to 2.2% for Scotland. As for Scotland, this growth was driven by international travellers.
Source: GB Travel Survey and International Passenger Survey. Expenditure adjusted to 2019 prices using the GDP deflator.
| Category | Area | 2011 | 2019 | Cumulative growth | Average annual growth |
|---|---|---|---|---|---|
| Visits (000s) | Scotland | 15,727 | 17,270 | 10% | 1.2% |
| Edinburgh | 3,698 | 4,904 | 33% | 3.6% | |
| Nights (000s) | Scotland | 63,287 | 74,111 | 17% | 2.0% |
| Edinburgh | 11,320 | 19,510 | 72% | 7.0% | |
| Expenditure (£m, 2019 prices) | Scotland | 5,180 | 5,739 | 11% | 1.3% |
| Edinburgh | 1,325 | 1,865 | 41% | 4.4% |
Source: GB Travel Survey and International Passenger Survey. Expenditure adjusted to 2019 prices using the GDP deflator.
17. The growth in the trends in visits, nights and expenditure at Scotland level has therefore not been as dramatic as the growth in the number of self-catering, B&B and guest houses premises on the NDR roll, or the large increase in listings on platforms. However, it is important to bear the following in mind:
a) The data have different coverage, e.g. the NDR data will have a 100% coverage of properties which meet eligibility criteria, but that is only a subset of the short-term let and wider tourism market, whilst the traveller survey data cover the entire tourism market, and will be subject to the normal limitations relating to sampling error.
b) Data on premises registered on the NDR roll is a stock variable, i.e. it relates to the number premises registered on a particular day, while visits, nights and expenditure are flow variables, i.e. they relate to the visits, nights and expenditure over the course of a year. Differences in the rates of occupancy for different types of accommodation can therefore help account for differences in trends. For example, the average occupancy rate for short-term lets over the course of a year may be lower than for other types of accommodation (particularly if the growth of online platforms has made it easier for properties to be let out for relatively short periods of time). To the extent that this is the case, any change in the number of short-term let properties will lead to a less than proportional change in the total amount of nights spent in the tourism sector as a whole.
c) The growth in the number of properties on the NDR roll may be affected by incentives to move between the council tax and NDR rolls due to differences between council tax and NDR rates. This difference has been particularly affected by the introduction of the Small Business Bonus Scheme (SBBS) for NDR properties in 2007, with the level of relief being increased to 100% in 2010, as well as any other changes in NDR and council tax payable on particular categories of buildings. This has created an incentive for owners to apply for their property to be moved from the council tax to the NDR roll, alongside an application for SBBS relief. For example, if someone was operating a short-term let which was available for less than 140 days a year, they might legitimately have decided to extend the period for which it was available in order to benefit from the SBBS. The independent Barclay Review of NDR[9] published in 2017 also identified that second home owners could use this differential between NDR and council tax rates as an avoidance tactic. In line with a recommendation from the Barclay Review, from 1 April 2022, self-catering premises will have to provide evidence of actual letting for at least 70 days, as well as evidence of an intention to let for at least 140 days in the year, in order to qualify for the NDR roll.
d) The growth in lettings on online platforms could, in part, reflect existing short-term let properties using a new marketing channel, instead of, or in addition to, offline channels such as magazines, rather than being new entrants to the short-term lets sector.
e) Some of the growth in short-term lets could have been due to displacement of growth in providers of other types of accommodation.
f) The impact of short-term lets will vary geographically. The number of self-catering properties on the NDR roll in Edinburgh has nearly tripled since 2010 (Table 2) and nearly two-fifths of Airbnb listings are in Edinburgh (Table 4), which is consistent with the growth in the total number of tourist nights and visits in Edinburgh being significantly above the Scottish average (Table 6). However, this is not just an Edinburgh phenomenon, with strong growth in self-catering accommodation across Scotland, including in rural areas which already had high levels of self-catering accommodation (Table 2).
18. In summary, the quantitative data presented in this section is consistent with feedback from stakeholders to our various consultations, as well as the independent research undertaken for the Scottish Government (discussed in section B3), that:
a) There has been significant growth in the number of properties which are being used for short-term lets. This means that it is important to have a regulatory framework in place which sets basic safety standards and allows local authorities to address noise and nuisance and other issues arising effectively.
b) There are regional concentrations of whole property short-term lets, which could have impacts on the functioning of neighbourhoods and housing markets. This means it is important that local authorities have the powers to manage numbers of short-term lets where these are causing problems; the Control Area Regulations provide them with the powers to do this through the planning system.
B1.2 Background: development of the short-term let regulations
19. Short-term lets have become the subject of much controversy in some parts of Scotland and evoke strong opinions. The 2018-19 Programme for Government[10] made a commitment to ensure that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with wider economic and tourism interests.
20. The Short Term Lets Delivery Group was established in 2018 to assess the evidence base and the impact, positive and negative, of short-term lets, identify the existing powers councils have and explore whether further measures were required. The Group comprised officials from across relevant areas of government, including: better regulation, community empowerment, economy, housing, licensing, planning, tax and tourism.
21. In April 2019, the Scottish Government launched a public consultation and commissioned independent research into the impact of short-term lets on people and communities. The 2019 consultation paper outlined possibilities for a regulatory approach, which included the licensing of short-term lets. The paper noted the range of approaches adopted in cities and countries around the world and asked for opinions on the types of short-term lets which should be regulated and the controls which should be applied. In parallel with the 2019 consultation, what is now the Planning (Scotland) Act 2019 completed its passage through the Scottish Parliament and made provision for the establishment of short-term let control areas. The reports on the 2019 consultation and research[11] were published on 28 October 2019.
22. On 8 January 2020, Kevin Stewart MSP, the then Minister for Local Government, Housing and Planning, announced plans to regulate the short-term let sector in the Scottish Parliament:
"First, I intend to establish a licensing scheme for short-term lets using powers under the Civic Government (Scotland) Act 1982. Secondly, I am prioritising work to give local authorities the power to introduce short-term let control areas under powers in the Planning (Scotland) Act 2019. Finally, we will review the tax treatment of short-term lets to ensure that they make an appropriate contribution to the communities that they operate in."
23. Work to implement the regulations was paused in March 2020 because of the coronavirus (COVID-19) pandemic but resumed in July 2020. A second consultation on detailed proposals was undertaken from 14 September to 16 October 2020. We had originally planned for a longer period of engagement on our proposals in autumn 2020. However, the timetable had to be compressed because of disruption caused by COVID-19 whilst working to ensure that the secondary legislation could still be laid at the Scottish Parliament in session 5. The report on the 2020 consultation was published in December 2020.
24. The Control Area Regulations were approved by the Scottish Parliament in February 2021, and came into force on 1 April 2021. The 2020 Licensing Order was approved by the Local Government and Communities Committee, but subsequently withdrawn ahead of a vote in the Scottish Parliament due to concerns raised by members and stakeholders.
25. In order to address those concerns, and develop guidance on the licensing scheme and planning control areas, the Scottish Government established a stakeholder working group in February 2021. Further information on the working group can be found in section C4.
26. On 25 June 2021, the Scottish Government published the Licensing Order and Business and Regulatory Impact Assessment in draft for a third, and final, consultation. The consultation ran until 13 August 2021.
27. On 7 October 2021, Shona Robison, Cabinet Secretary for Social Justice, Housing and Local Government wrote to the Convener of the Local Government, Housing and Planning Committee[12] setting out a number of significant and pragmatic changes that the Scottish Government had made to the Licensing Order following careful consideration of responses to our third consultation, and stakeholder views.
28. The Scottish Government remains committed to delivering a licensing scheme which introduces measures to protect the safety of guests and neighbours, and rolling these out without unnecessary delay. The date by which licensing authorities must have licensing schemes open to receive applications is 1 October 2022 and the deadline by which all short-term lets must be licensed is 31 June 2024[13].
29. In this BRIA, references to consultation are to the third (2021) consultation, unless the context demands otherwise; we refer to previous consultations as the "2019 consultation" and the "2020 consultation" where necessary to avoid any risk of confusion.
B2. Objective
30. The Scottish Government's purpose in regulation of short-term lets is to ensure that local authorities can balance the needs and concerns of their communities with wider economic and tourism interests.
31. The Licensing Order establishes a licensing scheme to ensure short-term lets are safe and address issues faced by neighbours; and to facilitate local authorities in knowing and understanding what is happening in their area and handling complaints effectively.
32. The Licensing Order is complemented by the Control Area Regulations which make provision for local authorities to designate control areas. The purpose of control areas is to help manage high concentrations of secondary letting (where it affects the availability of residential housing or the character of a neighbourhood); to restrict or prevent short-term lets in places or types of building where it is not appropriate; and to help local authorities ensure that homes are used to best effect in their areas.
33. Both these instruments will be complemented by possible changes to taxation to make sure short-term lets make an appropriate contribution to local communities and support local services. The review of the tax treatment of short-term lets is being progressed by the Scottish Government separately.
B3. Rationale for Government intervention
34. The Programme for Government 2018-19[14], published on 4 September 2018 (page 97), made a commitment to:
"work with local government, communities and business interests to ensure that local authorities have the appropriate regulatory powers to allow them to take the decisions to balance the needs and concerns of their communities with wider economic and tourism interests. These powers will allow local authorities to ensure a safe, quality experience for visitors, whilst protecting the interests of local communities."
35. The regulation of short-term lets supports the following National Performance Framework objectives:
- We have a globally competitive, entrepreneurial, inclusive and sustainable economy.
- We have thriving and innovative businesses, with quality jobs and fair work for everyone.
- We tackle poverty by sharing opportunities, wealth and power more equally.
- We live in communities that are inclusive, empowered, resilient and safe.
- We value, enjoy, protect and enhance our environment.
- We are creative and our vibrant and diverse cultures are enjoyed widely.
36. The rationale for government intervention[15] is based around:
a) asymmetric information affecting guest safety; and
b) negative externalities, such as:
(i) increased housing costs;
(ii) reduced amenity;
(iii) quality of place;
(iv) noise and nuisance; and
(v) criminal use.
37. We consider these in turn.
38. Asymmetric information can occur when one party involved in a transaction has different information about the good or service than the other party.
39. The primary motivation for introducing this legislation is to enhance guest and neighbour safety. (Neighbour safety is affected, for example, through risk of fire.) In the private rented sector, a landlord must register with the local authority that their rented property is located in before they can let a property. As part of the registration process, the local authority will check whether the landlord is a fit and proper person. A prospective tenant is able to search the Scottish landlord register to check whether a landlord is a fit and proper person before living at the property. A similar process exists for Houses in Multiple Occupation (HMO), which require a licence. In both cases, the property must at least meet the repairing standard and the landlord must be a fit and proper person.
40. At present, short-term lets are unregulated[16]; the primary mechanisms available to the average guest to find out about accommodation is through peer review on platforms or through grading systems, such as VisitScotland's grading system for tourism accommodation[17]. Even assuming the reviews are authentic, peer review tends to be focused on quality of experience rather than safety. Whilst there is some overlap between quality and safety, most guests will not have the time, inclination or skills to examine or comment upon safety features. Tourism grading systems are voluntary and do not provide the same level of assurance as a mandatory licensing scheme.
41. The primary concern stemming from the lack of regulation is that people may unwittingly stay in accommodation that is unsafe. The mandatory safety conditions for the licensing scheme will apply across Scotland for all types of short-term let and set licensing requirements around water, electrical, gas and fire safety. Broadly speaking, this asymmetry of information is addressed through the mandatory licence conditions.
42. This asymmetry of information can also lead to market failure in the sense that prices determined by the market do not provide proper signals to consumers (guests) and producers (hosts). If it is difficult for guests to distinguish the safety and quality of short-term lets, this could mean that some hosts may offer lower prices because they do not incur costs required to meet safety standards, and thus undercut hosts who do ensure that their accommodation is safe. If there was much better information (through licensing), then unsafe accommodation should be removed from the market and hosts will be competing on a level playing field of compliance with mandatory safety conditions. It may even be possible that a licensing scheme could boost overall demand for short-term lets by providing consumers with increased confidence in the functioning of the short-term lets market.
43. A negative externality occurs when the action of one party adversely affects another party, but this is not accounted for in the market price of a good or service. This can result in an outcome where the efficient amount of a good or service supplied is exceeded and unnecessary social costs are imposed. One example is the impact of poor quality short-term lets on the safety of neighbours. The issue of safety was discussed above in relation to guests, but the fact that poor safety conditions can also impact on neighbours, who are not party to the short-term let, and whose interests may therefore not be taken into account, strengthens the force of this rationale for regulation. Other examples, discussed below, are more variable across Scotland and will be addressed through the discretionary powers given to local authorities through the Licensing Order and Control Area Regulations.
44. An example of a negative externality arising from short-term lets, the impact of which can vary substantially across Scotland, is the effect on local housing markets and communities. Research for the Scottish Government on the impact of short-term lets[18] on local communities identified that there were just under 32,000 active Airbnb listings in May 2019 across Scotland, with nearly 70% of these being secondary letting (whole properties)[19]. In Edinburgh City Centre and Skye, it was estimated that secondary lets actively listed on Airbnb accounted for just over one in ten of all dwellings in these areas[20].
45. In areas like Edinburgh City Centre and Skye, where there is high demand for short-term accommodation, it may be more profitable for a landlord to let their property as a short-term let, rather than a long-term let, reducing the supply of private rented sector accommodation. It may also attract investors looking to buy property to let as a short-term let, competing with residents looking for permanent accommodation in the area. This reduction in the supply of housing available to residents can impose social costs that are not borne by short-term let hosts:
a) increased costs of housing (renting or purchase) for local people;
b) the supply of local amenities for residents may decrease if there are not enough residents to make these amenities financially viable;
c) the quality of the neighbourhood and sense of community can be adversely affected if residents feel less safe because of the high concentration of short-term lets or if residents have fewer permanent neighbours;
d) specific nuisance such as through noise, littering and other forms of antisocial behaviour; and
e) use of short-term let accommodation for criminal enterprises (such drug dealing, sex trafficking etc.), with or without the collusion of the host.
46. The potential negative impacts of short-term lets on local communities are evidenced in the research the Scottish Government carried out in 2019. This research showed that there is a large degree of concern about the prevalence of short-term lets across Scotland, and in turn there are social costs caused by short-term lets that are borne by residents. The research included a survey of 197 residents in five areas of Scotland:
- Edinburgh (Central ward comprising the Old Town, New Town and Tollcross) – established world heritage site, city-centre tourism;
- The East Neuk of Fife (East Neuk and Landward ward coastal towns excluding St Andrews) – established coastal second home location;
- Fort William – rural expanding tourism;
- Glasgow (City Centre ward including Merchant City, Anderston and Yorkhill) – inner-city centre event tourism; and
- Eilean a' Chèo (Skye) – remote rural established tourism.
47. Resident respondents were asked whether they agreed or disagreed with the following statements about the effect of short-term lets; the share that agreed with these points is as follows (the remaining disagreed or were neutral):
- Reduction in homes for general residential use – 62%
- Reduced housing affordability for local people – 57%
- Negative impact on parking – 53%
- Increased littering / waste – 52%
- More traffic problems – 47%
- Inconsiderate use of common spaces – 42%
- Noise and disturbance – 38%
- Negative impact on overall character (of neighbourhood) – 35%
- Increased cost of living in neighbourhood – 35%
- Damage to homes or common areas – 27%
- Higher insurance premiums – 26%
- Threats or abuse – 21%.
48. Exploring these concerns in more detail, in Edinburgh, most resident, community and business participants in the research highlighted the reduced supply of housing caused by short-term lets in the city centre, and the impact they felt this was having on housing costs. This was usually expressed as cost of rents in the private rented sector, although some community participants also highlighted local house sales being out of reach for residents, with properties sold to short-term let investors. It was claimed by many community participants that this has resulted in a "spiralling decline" for the sustainability of the local community as there was no way of attracting residents due to increasing prices combined with "over-tourism" in the area.
49. In Fort William and Skye, the suggestion from many business and community participants was that there was a considerable problem in sourcing workers due to lack of available residential housing. This was related to workers for the tourism industry, property construction and maintenance, other local industry, public services including health and education, and the university in Fort William. Some participants in each area explained that the lack of residential housing was exacerbated by the fact that there are very few viable housing alternatives in these rural areas due to the travel distances involved.
50. Concerns were also raised by many participants in all case study locations over the lack of health and safety regulations in short-term lets when compared to the residential letting market or other tourist accommodation providers. This was also linked to concerns about: building insurance, property repairs, and residents being unable to find hosts to resolve issues.
51. In Edinburgh, one of the most prevalent concerns and negative impacts of short-term lets raised by many resident and community participants was around the daily disruption caused by them. This included noise caused by the constant stream and volume of visitors and cleaners in common stairs; the noise of suitcases being wheeled about and bumping up and down two or three times every week; continual buzzing at the common entry doors at antisocial hours; visitors not understanding how to use the local refuse system; visitors not recycling; taxis arriving and departing often using their horns to indicate their arrival; and smoking in the common areas. The same participants discussed the fact that this could be ignored occasionally, but it was the incessant nature of the disruption which caused unhappiness. There was a sense of powerlessness to do anything about the problem due to the transient nature of tourists, the anonymity of hosts and no-one to go to "centrally in the council". This often related to visitors not understanding the etiquette of living in tenements.
52. Many resident, community and a few business participants, raised concerns about the impact that short-term lets have on the character of areas, and sustainability of communities. The most common issues related to the availability of local services, shops for local people, and the impact on falling primary school rolls due to falling residential population. These issues were raised in all areas apart from Glasgow.
53. The reduction of local services and shops for local people was raised by many community participants across all areas, except Glasgow. These participants often made a direct link between the growth of short-term lets and tourism to the closure of local amenities such as the post office, bank and library. They also noted that many retailers in these areas now concentrate on the tourists for trade, with examples of local shops such as the local butcher, green grocer and newsagent closing over recent years. Some participants in rural areas were concerned about the continued 'liveability' of the community for local people, with useful local shops closing for tourist shops. They highlighted that people now have to travel long distances for shopping due to local shop closures.
54. Evidence from the independent research on the adverse effects of unregulated short-term lets has been supplemented by feedback during the consultation process. Since January 2020, the Scottish Government has received around 2,000 letters and e-mails to Ministers and officials expressing a range of views on the subject of short-term lets. In addition, we have received just under 3,200 consultation responses across our three public consultations. In our first public consultation (2019), 60% of the responses were from affected residents and community groups but, as the proposals have become more specific about regulation in later consultations, more of the respondents are hosts and guests, as might be expected.
55. From stakeholder engagement with residents, we know that it is not just residents and communities in Edinburgh that are raising concerns. We have heard from residents in Glasgow, Ayr, Applecross (Highlands and Islands), Loch Lomond and Trossachs National Park, Isle of Harris, North Berwick, St Andrew's and West Linton, for example, about a range of issues, including safety[21].
56. These social costs to residents are not borne by short-term let hosts. If they were, it might be expected to result in a reduction in the problems associated with short-term let accommodation.
57. The legislation seeks to remedy this by giving local authorities discretionary powers through: the Licensing Order to ensure that short-term lets are safe and to minimise nuisance for neighbours and communities; and through the Control Area Regulations to designate parts of their local authority as control areas in which concentrations of short-term lets and loss of amenity can be addressed. This approach recognises that these negative externalities may not be prevalent across all areas of Scotland, or in all areas of a local authority, by giving local authorities discretionary powers to flex to local circumstances.
58. The Licensing Order will give local authorities discretionary powers to add licence conditions to address local needs and concerns. These conditions can be applied generally (to all licences), in certain circumstances (e.g. tenement buildings) and individually to a specific licencee (though this is only likely if problems have arisen). This will allow local authorities to target specific measures on the specific licencees or areas with specific problems.
59. In a control area designated by a planning authority under powers in the Control Area Regulations, a host or operator seeking to use a dwellinghouse for secondary letting would need to apply for planning permission to be able to do so, which could be refused. This power to designate control areas (subject to the approval of the Scottish Ministers) enables local authorities to manage the prevalence of short-term lets in their area, and reduce social costs arising from short-term lets.
Contact
Email: shorttermlets@gov.scot
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