Short-term lets consultation: response analysis

Part 2 - Definition of Short-Term Lets

Types and Definitions of Short-term Lets

27. The consultation paper noted that there is currently no statutory definition of what constitutes a short-term let in Scotland; although the term is widely used, it has different meanings depending on the context and the speaker. The paper set out three ways in which a host might make accommodation available to a guest. First, by the letting of a room or rooms to the guest with the host in residence (called 'sharing'). Second, the letting of a room or rooms or the entire property where the host normally lives, when the host is absent, i.e. on holidays (called 'swapping'); thirdly, the letting of a room or rooms or the entire property, where the host does not normally live and the host is absent (called 'secondary letting'). The consultation paper also suggested a cumulative period during which accommodation is made available for use. Various types of accommodation to be excluded were also stated.

28. Question 2 asked,

Q2: 'Should a regulatory framework distinguish between sharing, swapping and secondary letting?'

29. The breakdown of answers of the full respondent base (1086) for this question is shown below:

Table 4: Q2

	Number
	Yes	No	Don't know	No response
Affected resident (592)	474	55	46	17
Community organisation (63)	57	2	3	1
Guest (62)	48	11	2	1
Host with 1 property (220)	159	29	26	6
Host with 2+ properties (103)	55	28	18	2
Platform (2)	1	-	1	-
Host intermediary (19)	13	5	1	-
Hotel / B&B owner (16)	10	4	2	-
Local authority (18)	12	-	1	5
Other (non short-term let) landlord (19)	13	2	2	1
Other business (36)	26	2	-	8
Other (118)	96	11	10	1
Total organisations (111)	82	9	6	14
Individuals (975)	728	119	93	36
Total respondents (1,068)	810	128	99	50

30. A majority of respondents agreed that a regulatory framework should distinguish between sharing, swapping and secondary letting, with only a few disagreeing; a similar number of respondents were unsure. Results between organisations and individual respondents were similar, although there was some variation between types of respondents; large majorities of community organisations, affected residents and guests agreed, whilst smaller majorities of hosts with more than one property and host intermediaries agreed.

31. Respondents were asked for their reasons for their response and 861 commented, with the breakdown of those making a response as follows:

Table 5: Q2

	Number
Affected resident	464
Community organisation	54
Guest	55
Host with 1 property	181
Host with 2+ properties	88
Platform	2
Host intermediary	19
Hotel / B&B owner	15
Local authority	16
Other (non short-term let) landlord	15
Other business	29
Other	90
Total organisations	95
Individuals	766
Total respondents	861

32. Overall, reflecting the answers above, there were far more reasons and explanations put forward in favour of, rather than against, distinguishing between sharing, swapping and secondary letting. By far the most common reason put forward (cited by a large minority of respondents, and especially larger minorities of affected residents, guests and local authorities) was that secondary lets have negative impacts in terms of community, disruption and housing availability, whereas there are no such impacts incurred with sharing or swapping. It was pointed out by a small minority of respondents that in sharing or swapping scenarios, the owners (having a vested interest) are present or contactable to solve problems, whereas owners are often absent with secondary lets.

33. Another distinguishing feature perceived by a small minority of respondents was that secondary letting is commercial in nature and therefore a business activity, whereas swapping and sharing are not done for profit. As noted by a local authority:

"Both sharing and swapping are distinct to outright secondary letting (which is presumably commercial in nature) where the circumstances are different as an owner is probably less likely to be known to neighbours and the potential frequency of operation as STL [short-term let] can be far higher."

34. Similar but slightly smaller numbers reasoned that they have clear differences, risks and impacts without specifying further.

35. In addition a few respondents remarked that secondary letting needs stronger regulation than sharing or swapping or that sharing and swapping needed no regulation in order to encourage these activities, given they were more acceptable. That said, similar numbers were generally in favour of a regulatory system for all short-term lets, as long as this did not result in a 'one size fits all' approach or as long as it ensured there were no loopholes to be exploited.

36. A need for clear or statutory definitions of short-term let types was requested by a few respondents as there were perceived to be grey areas among types of let, making it difficult to tailor regulations to each. For example, attendees at one event felt the use of the term 'swapping' can be confusing as some individuals would assume this refers to a mutual swapping of two homes at the same time, rather than someone making their primary home available while they are absent, for instance on holiday. There were also some comments from attendees at consultation events that any short-term let which makes money should be classed as 'commercial' and that 'secondary letting' should be referred to as 'professional letting'. One organisation referred to the Planning (Scotland) Bill and the definition used for a short-term let. This organisation also pointed out that a property may be used in a number of different ways over a period of time and that any framework will need to be capable of dealing with these changes.

37. Small numbers of respondents felt that the three distinctions of sharing, swapping and secondary letting needed reassessment as they do not reflect how short-term lets operate. Smaller numbers of respondents regarded swapping as having similar detrimental impacts to secondary letting and therefore needed distinguishing from sharing; reasons given included owners being present in a sharing scenario, and the perception that the swapping concept could be easily exploited or abused.

38. A majority of respondents also felt that there was a need to distinguish between different types of secondary letting, since it was perceived that some should have different regulatory treatment from others given that some types have less of a negative impact. Various possible demarcations and separate classifications, many of which were set in the context of giving beneficial treatment to more rural-type lets, were suggested as below, mostly without giving any views as to whether regulations should be stricter or looser for the suggested types of letting:

• Serviced apartments, or multiple properties in a tailored building.
• Self-catering.
• Duration of stays per year (e.g. less than 140 days vs more than 140 days).
• Second homes letting.
• Holiday cottages.
• Pods.
• Caravans.
• Huts.
• 'ghost hotels'; these are listings that may look like private rooms to let in a primary residence, but actually a two bedroom flat could be let out as two separate rooms so that guests do not live with the host, but with another guest (or guests). It was also suggested that there is a need to be careful in considering this in regulations because of a potential loophole if 'sharing' is considered acceptable without same level of regulation as 'secondary letting'. There was also a suggestion that 'ghost hotels' could be a fourth model of short-term let alongside other types of short-term lets.

39. A few respondents maintained there was a need for regulations to be area-specific, as, for instance, the situation in Edinburgh was perceived to be very different to that in rural areas such as the Highlands and Islands.

40. Other points made about how to regulate secondary lets specifically were made by small numbers of respondents as follows:

• All short-term lets, and particularly secondary lets, should have fire and health and safety regulations on a par with long-term rentals, houses in multiple occupation (HMO) properties, B&Bs or guest houses to protect occupants.
• Secondary short-term lets need to be properly taxed. Suggestions for taxation included: scrapping the council tax exemption (since local services are used), scrapping capital gains tax relief, levelling the playing field with other accommodation providers, ensuring they are paying business rates, taxing the income and ensuring they do not benefit from Rent a Room tax relief. There were also a very small number of observations that there need to be different taxation rules for different forms of secondary let, without specifying further.
• Numbers of secondary lets need controlling or restriction in terms of number of nights rented.
• Secondary lets need to be licensed (e.g. have planning permission for a change of use).

41. Much smaller numbers of respondents put forward reasons for the regulatory framework not distinguishing between sharing, swapping and secondary letting. These included:

• All types of short-term lets need regulating equally in virtue of being short-term lets (e.g. for consistency).
• All short-term lets need to meet the same safety standards to protect guests.
• All types of short-term lets have negative impacts (e.g. on communities or availability of housing).
• Differentiating between them would add too much complexity (keeping the rules simple will make them easier to police).
• Differentiating would leave too many loopholes and make it easy to 'game' the system (e.g. difficult to confirm whether a property is a swap or a secondary let).
• All types need to pay the same tax as all operate as businesses.
• Defining types of short-term lets is too difficult; flexibility is required.

42. Question 3 then asked,

Q3: 'Should the rules be capable of being different depending on the type of accommodation? For example, to distinguish between tenement flats and detached houses?'

43. The breakdown of answers of the full respondent base (1086) for the first part of this question is shown overleaf:

Table 6: Q3

	Number
	Yes	No	Don't know	No response
Affected resident (592)	249	262	72	9
Community organisation (63)	27	28	7	1
Guest (62)	25	30	6	1
Host with 1 property (220)	70	114	30	6
Host with 2+ properties (103)	23	66	13	1
Platform (2)	-	2	-	-
Host intermediary (19)	7	10	2	-
Hotel / B&B owner (16)	4	10	2	-
Local authority (18)	11	1	1	5
Other (non short-term let) landlord (18)	5	10	3	-
Other business (36)	14	12	1	9
Other (118)	50	50	14	4
Total organisations (111)	46	40	8	17
Individuals (975)	384	448	114	29
Total respondents (1,086)	430	488	122	46

44. Opinions were split; a large minority of respondents agreed that the rules should be capable of being different depending on the accommodation type, but a slightly larger minority disagreed. Across types of respondents, a majority of local authorities agreed, but only a small minority of hosts with more than one property agreed.

45. Respondents were also asked for their reasons; 866 respondents commented, with the breakdown of those making a response as follows:

Table 7: Q3

	Number
Affected resident	469
Community organisation	53
Guest	52
Host with 1 property	175
Host with 2+ properties	88
Platform	2
Host intermediary	19
Hotel / B&B owner	12
Local authority	16
Other (non short-term let) landlord	15
Other business	29
Other	94
Total organisations	93
Individuals	773
Total respondents	866

46. Among those giving reasons in favour of the rules being different depending on accommodation type, a large minority of respondents (but only a few hosts with more than one property or hosting intermediaries) singled out tenements, flats or shared blocks as needing special treatment, because of negative impacts on neighbours, many of which were mentioned and included:

• Noise, partying and antisocial behaviour of guests.
• Security issues (e.g. presence of strangers and key safe issues).
• Health and safety.
• Wear and tear on communal areas and pressure on common maintenance.
• Absentee hosts (no-one to contact).
• Waste issues (poor sorting of recycling and increased amounts).
• Building insurance issues.
• Loss of community.
• Parking problems.

47. Stricter rules and strong protection for residents in tenements or flats were recommended by a few respondents, with similar numbers wanting short-term lets banned or restricted in number in tenements. Rules were suggested including only allowing short-term lets if all other owners or long-term tenants agreed, or with council permission or licensing. Edinburgh was mentioned in particular as being an area that had problems associated with short-term lets in tenements.

48. A few respondents agreed with the importance of differentiating between residences with communal entrances (e.g. doors, hallways, stairs and back greens) and those with private entrances; in the latter case there were felt to be fewer disturbances imposed on residents. It was pointed out by a very small number of respondents that in some cities (Barcelona, Madrid and Glasgow were cited) guests had to enter through separate entrances in a short-term let scenario.

49. A few respondents chose to focus on how there were relatively limited consequences of short-term letting where the use of detached houses was concerned, although one organisation noted that there should be some limitations on detached houses as these are often needed as accessible homes for disabled people. 'Lighter touch' regulation was suggested, and reasons suggested as below:

• Absence of communal space.
• Fewer negative effects on neighbours.
• Fewer neighbours to be affected.
• Fewer security issues.
• Guests likely to be older or paying more.

50. A few respondents were against a 'one size fits all' approach, and stated that impacts differ depending on property type so that flexibility in rules was desirable. Similar numbers specified various types of short-term let accommodation which they thought should have their own rules as they produced lots of different effects; B&B's, semi-detached properties, terraced houses, student flats, crofts, pods, bothies and wigwams were all cited in this respect. Further, similar numbers of respondents cited a need to take account of location to reflect local issues and impacts, particularly in lieu of differences in accommodation issues between urban and rural (e.g. where there are no tenements but short-term rentals are traditional) scenarios. Comments included suggestions to leave specific conditions to individual local authorities, or to only regulate in areas with identifiable problems.

51. Other comments referred back to the previous question with smaller numbers of respondents citing the need to regulate more heavily with secondary lets, or the need to regulate short-term lets more strictly whichever the type of property. A few respondents stated that the most important issue was how well managed the property is, rather than the type of property.

52. Reasons were also given by respondents for not agreeing that the rules should be different depending on the type of accommodation; chief amongst these was that all short-term lets have the same impact irrespective of property type and therefore regulation should not distinguish between them (cited by a large minority of hosts with more than one property). Smaller numbers of respondents thought it would be more useful to differentiate using other criteria when constructing the rules; a few stated that all types of short-term let accommodation can generate problems for neighbours in terms of noise, behaviour and safety.

53. Further reasons for not agreeing that the rules should be different depending on the type of accommodation were given by small numbers of respondents as follows:

• Rules need to be consistent between property types to ensure fairness.
• Differing rules would make enforcement more difficult.
• Differing rules would overcomplicate administration.
• All types of short-term let are perceived as negatively affecting housing availability, rent and prices for residents.
• All short-term lets are commercial in nature.
• Different rules are exploited by landlords (e.g. redesignation of property types).
• Differentiation having unintended consequences such as e.g. incentivising short-term letting in detached properties if there was advantageous regulatory treatment.
• All property irrespective of type needing to have the same health and safety and fire regulations.
• A need for consistency so as not to confuse guests.
• Rules should only vary according to the type of short-term let (sharing, swapping or secondary letting) or other specified criteria (suggestions included: number of nights available, number of occupants, amount of income, type of owner (company vs. individual), size of unit and density of short-term lets in the area).
• Rules should be flexible and proportionate so that under-utilised occupied property can be used beneficially.

54. Finally, a very small number of respondents were against any further regulation of short-term lets, or thought that better enforcement of existing laws or local regulations would be adequate. One respondent noted that this is a planning matter and that planning authorities should determine the suitability of rules based on local plans and policies.

55. The final question in this section of the consultation paper asked,

Q4: 'Do you have any other comments on any other aspect of the definition of short-term lets?'

56. A total of 716 respondents made comments at this question. The following table provides a breakdown of those making any response to this question.

Table 8: Q4

	Number
Affected resident	366
Community organisation	47
Guest	39
Host with 1 property	146
Host with 2+ properties	83
Platform	2
Host intermediary	17
Hotel / B&B owner	9
Local authority	16
Other (non short-term let) landlord	12
Other business	30
Other	81
Total organisations	92
Individuals	624
Total respondents	716

57. A large number of those making comments simply reiterated their positions from the previous 2 questions. Small numbers of respondents said that they agreed with how short-term lets were defined in the consultation, and smaller numbers agreed with or preferred the Association of Scotland's Self-Caterers (ASSC) description of short-term rentals (four models: traditional self-catering, collaborative economy via online platform, serviced apartments and aparthotels).^[9]

58. A few respondents stated that it was difficult to get a precise definition because short-term lets were not easy to categorise; opinions indicated that the definition given in the consultation was regarded as too much of a 'catch-all' and that greater flexibility was needed because of the blurring of types of short-term lets. That said, similar numbers were in favour of a simple or straightforward definition in order to ensure ease of compliance and enforcement, and reduce the chances of unintended consequences. One organisation suggested the need for a consistent definition across all local authorities to help ensure clarity and consistency for all those operating within the sector.

59. A few respondents proposed different treatment for sharing from other types of short-term let, based on the host being present and renting a room only as being different to renting an entire property.

60. A wide variety of other suggestions were made about how to define short-term lets, each made by a few respondents and some of which went over the ground covered in questions 2 and 3. These included the following:

• Differentiating between professional or full-time or multi-let operators and amateurs or part-time or one property short-term let hosts.
• The definition should explicitly reference or involve online accommodation platforms; for instance by defining a short-term let as any property advertised on a platform, by requiring platforms to identify non-registered or non-licensed properties themselves or by providing data to a regulatory database to enable tracking of property use.
• Including specified types of other properties in short-term let definitions (e.g. student accommodation / flats / halls of residence, accommodation for short-term workers, self-catering offered by hotels or all types of holiday let).
• Excluding specified types of properties from any short-term let definition (e.g. self-catering accommodation, caravans, yurts, boats, pods, tents, accommodation for short-term workers, scout centres, temporary homeless accommodation or term-time lets).
• Differentiating between commercial or business activity-related short-term letting and non-commercial (e.g. in situations where non-paying guests such as the family of the owner are staying).
• Differentiating between holiday lets (e.g. self-catering accommodation in rural areas or extended stay holiday homes) and other city-based short-term lets.
• Define by numbers of guests staying in the property or number of stays per year.
• Clarity of definition between short-term letting and HMOs / Long-term rentals (LTR) / Private Rented Sector (PRS) accommodation.
• Various concerns or alterations to the cumulative 28 day rule; both longer and shorter time periods were suggested, as well as comments that a short-term let should be defined as any individual stay that is less than a given period. Suggestions as to alterations to the cumulative rule varied between 14 days and 45 days.
• A need to distinguish between good and bad hosts, acknowledging the quality of short-term letting arrangements.
• Short-term letting definitions need to coincide with government or HMRC definitions.

61. Other responses took the form of general comments about the regulation of short-term lets rather than how they should be defined; more of these comments were negative than positive about the current regulatory situation for short-term letting. Examples included:

• Ensuring all short-term lets are taxed appropriately.
• All short-term lets having the same health and safety standards as other forms of accommodation.
• Implementing regulations at a local or area-specific level as local conditions vary.
• Limiting numbers of short-term lets in shared dwellings or having an upper limit for the number of nights let per year.
• Short-term lets needing planning permission for change of use.
• Concerns about obtaining accurate data about short-term lets in order to regulate them.