Short-term lets - licensing scheme and planning control areas: consultation

3. Introduction

3.1. The 2019 consultation paper set out the benefits and issues arising from short-term lets. It then set out some design principles which were widely accepted. The current version of the principles is at Annex A. We are developing our detailed proposals informed by the evidence gathered from consultation and research and based around these principles.

3.2. Stakeholders have been supportive of taking an evidence-led approach and ensuring we do no more or less than we need to deliver our policy objectives. It is important that the Licensing Order and Control Area Regulations do no more or less than address the issues with short-term lets, whilst preserving as much of the benefits as possible, and following the design principles.

Purposes of licencing, planning and taxation interventions

3.3. The high-level policy purpose behind each of the three interventions (licensing, control areas and taxation) is intended to be as follows:

• Licensing – 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.
• Control areas – to help manage high concentrations of secondary letting (where it affects the availability of residential housing and 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.
• Taxation – to make sure short-term lets make an appropriate contribution to local communities and support local services.

Definition of a short-term let

3.4. We need a clear definition of short-term lets so that the Licensing Order and Control Area Regulations are consistent and people know what is and is not covered. The proposed definition is explained in chapter 4. To avoid the potential for dispute in planning and licensing, and to aid enforcement, we need a definition that is as simple to understand as possible and that can sensibly be determined.

The Control Area Regulations

3.5. The 2019 Act amends the 1997 Act to enable local authorities to designate control areas, where change of use planning permission would always be required to operate a short-term let. Our proposals for how this will work are set out in chapter 5. The provision in primary legislation can be found at Annex B for ease of reference.

3.6. The Control Area Regulations will be made by section 26B of the 1997 Act as inserted by the 2019 Act. Section 17 of the 2019 Act came into force on 18 May 2020^[5] for the purposes of making regulations under section 26B(5) of the 1997 Act.

The Licensing Order under the 1982 Act

3.7. The top priority for the proposed licensing scheme is to ensure the safety of guests, hosts and neighbours. Local authorities will also be given the power to introduce licensing conditions from a menu of options to address local issues of concern, e.g. imposing restrictions on noise levels at night or littering. Finally, it will also enable local authorities to better understand how and where short-term lets are operating in their area. The licensing scheme is to be operated by local authorities but Scottish Government will specify the mandatory conditions which must apply across Scotland. Our proposals for how the licensing scheme will work are at chapter 6.

3.8. Chapter 6 sets out how the application process will work and what information hosts need to provide with the application form. It explains how the application fee and subsequent fees for monitoring and compliance might be raised. It explains the mandatory safety and other conditions which will apply across Scotland and the discretionary conditions which local authorities might choose to apply if relevant for their areas. It sets out how compliance will be monitored and the sanctions for failing to comply with licence terms and conditions. Finally, it sets out how local authorities and Scottish Government could share and publish data to help with enforcement and understanding of levels of short-term let activity across Scotland.

3.9. The licensing scheme will be established by the Licensing Order made by standard affirmative order under section 44 of the 1982 Act.

Next steps

3.10. The Scottish Government intends to lay both the Licensing Order and the Control Area Regulations in December 2020. They are expected to come into force in April 2021. However, local authorities will require time to get ready to implement them and we need to make transitional arrangements to give hosts already operating short-term lets time to comply with the new regulations.

3.11. In order to help local authorities and others prepare for the implementation of the new regulations, the Scottish Government intends to produce two guidance documents in spring 2021, one aimed at local authorities and the other for hosts and platforms.