Short-Term Let Licensing Implementation Update Report 2024

3. Introduction

Five years ago, in the Scottish Government’s 2018-2019 Programme for Government^[1], we made a commitment to ensure local authorities have appropriate regulatory powers over short-term lets to balance the needs and concerns of their communities with wider economic and tourism interests.

This recognised that over the last decade the short-term let sector has both grown significantly and changed in nature. While this has brought economic benefits, it has also raised concerns about consistency of quality and the impact on neighbourhoods.

Following three public consultations in 2019, 2020 and 2021^[2], the Scottish Parliament passed legislation in January 2022 introducing a licensing scheme for short-term lets. Licensing safeguards the important role short-term let accommodation plays in our economy by providing assurance to guests and communities on safety and quality, such as gas, electrical and fire safety compliance. It also brings the regulation of short-term lets in line with other accommodation such as houses of multiple occupation and the private rental sector.

Local licensing schemes have been operational since October 2022. Existing hosts and operators were given until April 2023 to apply for a licence and maintain their existing bookings but this was then extended to October 2023 to reflect cost of living pressures and to give hosts more time to prepare and apply. Throughout the transitional phase of the scheme the Minister for Housing has made regular updates to Parliament and the Local Government Housing and Planning Committee, including our approach to monitoring and the scope of this update.

3.1 Scope

The scope of the 2024 update is to:

• report on initial short-term let licence application levels across Scotland;
• consider current operational processes; and
• identify operational improvements, where appropriate, and update previously published impact assessments with actual data in place of estimated information, where available.

The Minister clarified that it is not in scope to amend the core principles of licensing, which the Committee and Parliament recognised as being integral to the original legislation. This forms the basis for local schemes to which many thousands of hosts have already applied for licences. This means the intent is not to alter licensing types (home-sharing, home letting and secondary letting), the core principles of licensing (mandatory and additional conditions, public scrutiny and opportunity to object) or the delegation of powers to licensing authorities to administer local licensing schemes.

This update does not assess the health of the short-term let sector through the lens of licensing. It is too early in the operation of the scheme to draw conclusions and it is important to also recognise there are many other relevant factors that also contribute to tourism and business trends.