Short-term lets consultation: response analysis

Policy Considerations and Outline Proposals

187. This section of the consultation paper asked two questions in relation to the potential for a national framework that provides a menu of discretionary powers for councils to implement measures appropriate to their area or parts of their area, so they can respond to local conditions and concerns:

• Level 1 Registration scheme - where a council opted to implement regulation, a minimum requirement might be a basic registration scheme, for which a fee may be charged. Registration could be required for all types of hosting. This would be unlikely to curtail any short-term letting activity.
• Level 2 Licensing scheme - councils wishing to apply additional measures could opt for a licensing scheme, which could include and expand on the registration scheme.
• Level 3 Market-based mechanisms to control short-term lets - this might include additional financial (dis)incentives to control some types of short-term let. It might also be necessary to take account of, and / or consider changes to relevant taxes and reliefs such as council tax, non-domestic rates, Small Business Bonus Scheme, VAT or Rent a room relief on income tax. Question 18 asked,

Q18: 'Do you have any comments on the controls or conditions which councils should be able to set through a registration or licensing regime?'

188. A total of 558 respondents commented at this question. The following table provides a breakdown of those who chose to respond.

Table 22: Q18

189. A majority of respondents, across all sub-groups, supported regulation for short-term lets in some form.

190. A small minority of respondents noted their support for a Level 1 registration scheme, with some highlighting the benefit of this in providing data on the levels of activity across participating council areas; this was supported more by hosts with more than one property, local authorities and other businesses. Some of these respondents suggested this should be on a par with the Landlord Registration Scheme in relation to long-term lets. A few respondents also made some form of reference to different elements of the Landlord Registration Scheme, such as gas safety checks, smoke detectors and having an Electrical Installation Condition Report (EICR) and felt that owners of short-term lets should have to comply with these; this was supported most by host intermediaries, local authorities and other businesses. There was very little opposition to the Level 1 registration Scheme.

191. A small minority of respondents also noted their agreement with a Level 2 licensing scheme and felt this should be mandatory; highest levels of support came from affected residents, guests and local authorities. A key benefit was that this would help to provide data on the numbers of short-term lets. Only a very small number of respondents - primarily hosts - did not support a Level 2 licensing scheme, on the grounds that this would lead to more bureaucracy and red tape. A smaller number of respondents referred specifically to licensing with a levy or charge to raise tax which could be used to support the oversight and enforcement of the short-term sector. There were also a few comments that this would match the HMO licensing scheme.

192. There was a degree of crossover between support for Level 1 registration and Level 2 licensing, with a large majority who supported either of these also supporting both.

193. While small numbers of respondents felt that properties that are shared or swapped should not be included in any licensing scheme, small numbers of respondents suggested that those who share or swap their properties should have to register their property, but should not have to comply with Level 2 licensing. A small number also suggested that all short-term let properties should have to register.

194. A very small number of respondents agreed with the option for a consistent national framework across Scotland with standardised regulation and registration, although some of these suggested a need for local flexibility to be built in. Linked to this, a small minority of respondents noted their support for discretionary powers for councils to be able to implement measures appropriate to their area or parts of their area; this was heavily supported by local authorities. It was felt that councils need flexibility to determine suitable rules or to have local variations to suit the local market. Some suggestions from respondents included being able to refuse licences in areas of high tourist pressure, in tenements, in blocks of flats and residential buildings, with some specific reference to Edinburgh.

195. Allied to this point, a few respondents noted that councils will need enough staff and resources to be able to police any licensing scheme that is introduced so that they can enforce any regulations and introduce effective restrictions and penalties such as revoking licences or in limiting the number of licences in a specific area. There were comments from a consultation event that regulations introduced may be unworkable and that there will be difficulties in implementation due to a lack of funding and support of government who seem unwilling to act robustly. This latter point was made specifically in relation to Edinburgh. One example given during a consultation event in Edinburgh was of the difficulties of dealing with antisocial behaviour within the private rented sector, which would be a much greater challenge within the short-term lets sector. Furthermore, consultation event attendees also noted that some aspects of regulation should be compulsory as it will not be possible for local authorities to be able to effectively enforce all aspects of a regulatory framework.

196. Other comments made by very small numbers of respondents included:

• A need to consider the impact of short-term lets on the local community, with any granting of licences to include the views of community groups and local residents; any granting of licences should be approved by neighbours; and the needs of local residents should be considered first in terms of the availability and affordability of housing.
• The taxation system should not favour short-term lets over long-term lets.
• A need for a centrally-managed database or register of landlords to allow for visibility of ownership and to provide contact details when they are needed.
• All short-term lets should have to register, with no exceptions.
• The need to differentiate between properties that are shared or swapped, and other short-term lets, as the former do not create the same potential for antisocial behaviour.
• Short-term lets have an impact on the loss of housing stock and in some instances, will keep property occupied which otherwise would be empty (particularly in rural areas). There were some requests for data that demonstrates the correlation between short-term lets and a loss of housing stock; this viewpoint was supported by high numbers of platforms.
• While there is a need for local variations, there is not a need for additional regulatory burdens as these will not benefit most areas.
• Some requests for a low fee for registration, as many landlords with short-term lets, particularly those not in large cities such as Edinburgh, only make small amounts of money. Examples were provided of crofters who supplement their annual income by sharing their home during the tourist season.
• There is a need to rebalance the housing market and any licensing or registration scheme needs to take account of this.
• A small amount of criticism that current regulations for HMOs are not enforced and some supposition that any regulations introduced for short-term lets would also not be enforced.

197. Question 19 then asked,

Q19: 'Do you have any comments on whether a licensing scheme and / or market-based approach, and any associated charges, should apply to all types of short-term lets and whether conditions and / or charges should vary according to the type of property, its location or the number of rooms?'

198. A total of 656 respondents commented at this question. The following table provides a breakdown of those who chose to respond.

Table 23: Q19

199. The most common theme, cited by a small minority of these respondents was that a licensing scheme should apply to all types of short-term lets regardless of size, type of property or location. The key benefit was that this would provide a level playing field. Higher numbers of affected residents and community organisations supported this stance. A few respondents reiterated their general support for a licensing scheme and regulation within the short-term lets market; again, this was supported by higher number of affected residents and community organisations.

200. Once again, a small minority of respondents felt that registration should not be needed for sharing or swapping. Higher numbers of community organisations, hosts with one property, hotels / B&Bs and local authorities supported this viewpoint.

201. A few respondents commented that a condition and / or charge should vary according to the size of the property in terms of the number of bedrooms or rooms available to rent; there was more support from community organisations, hosts with more than one property, platforms and local authorities than across other sub-groups. A similar number felt there should be a stepped charge depending on the location; examples given by these respondents included the potential to charge more in Edinburgh where there is higher demand for short-term lets and less in more rural areas where there is a greater reliance on tourism for the local economy and where the tourist season may be shorter than in the major cities. A similar number cited type of property as a lever for a sliding scale of charges.

202. A smaller number suggested there should be a higher charge in areas where there is high demand for housing and where local residents have to pay more in rent or to purchase properties and where there is considerable pressure on available housing, or in areas designated as rent pressure zones (RPZs).

203. A very small number of respondents referred to the number of days per year allowed for short-term lets, with some suggestions that up to 140 days should incur no charge (more support from hosts with more than one property and platforms), although others (little by way of differentiation by sub-group) suggested a shorter period of only 90 or 30 days.

204. Once again, there was some reference to the need for councils to be able to set charges in line with local needs and problems.

205. Other comments, each made by very small number of respondents, included:

• Charges should be in line with profitability or income potential of a short-term let.
• Only charge landlords operating as commercial businesses or that those operating a commercial business should pay a higher charge.
• There should be higher charges in tenement blocks or in residential areas.
• Short-term lets should have the same regulations as HMOs or long-term lets.
• Licence fees should only cover the cost of administration and enforcement of regulations, and should not be a source of revenue for the local authority.
• All short-term lets should be compliant with health and safety regulations or planning regulations.
• Whatever regulation is adopted needs to be kept simple for administrative purposes and easy to enforce.
• Suggestions for limitations to be set on the number of licences in a stair or the number of properties to be rented out as short-term lets.
• Warning against creating a system that is difficult to enforce.
• Suggestions for registration for all short-term lets but licencing in some circumstances, for example, only for those operating on a commercial basis or those with multiple properties would have to have a licence; those sharing or swapping properties should be registered but not require a licence.
• Edinburgh is unique and its problems with short-term lets should not impact on legislation that affects the whole of Scotland; one or two respondents felt the consultation paper is too Edinburgh-centric.
• There should be collaboration between Scottish Government and online accommodation platforms, although one organisation cautioned against penalties being imposed against platforms for deliberately or negligently advertising unregistered or unlicensed hosts as this could have detrimental consequences for consumers and Scottish businesses.
• While there was a small amount of support for a market-based approach, a similar number of respondents noted their dislike for such an approach.
• Attendees at a consultation event suggested consideration of a limited number of licenses being made available for short-term lets as is the case in the taxi and HMO sectors. However, it was acknowledged that this would disadvantage new entrants to the sector.
• A cautionary note from one organisation was that if there are to be different conditions for different properties, then there will need to be clarity around these; they would also offer a potential for uncertainty in the sector.