Short-Term Let Licensing Implementation Update Report 2024

6. Operational processes and improvements

Key information:

Throughout Scotland, licensing authorities are responsible for administering short-term licensing in their area. Short-term let hosts apply for a license from the licensing authority where their accommodation is located.

There are mandatory conditions that hosts must comply with to obtain a licence, which are the same across Scotland. The Scottish Government has published non-statutory guidance for hosts and licensing authorities about the operation of short-term let licensing. This sets out the legal requirements and duties placed on individual parties, as well as encourages authorities to consider and be mindful of the Scottish Government’s policy intent when they set their local policies and establish operational processes.

The scope of this update considers operational processes but not with the intention to amend the core principles of licensing, which covers: mandatory and additional conditions; public scrutiny and the opportunity to object to applications; and the delegation of powers to licensing authorities to administer local licensing schemes.

Our findings are grouped into broad themes and we have noted feedback we have received from stakeholders including; licensing authorities, delivery partners, the Industry Advisory Group, trade associations, community groups, operator agents, operators and individual correspondents. The feedback is categorised to show linked themes outlining what is working well and where there are concerns/ challenges.

The Scottish Government’s response, under each theme, includes any action/activities we are already doing or propose to undertake.

6.1 Theme: Safety

Short-term let licensing introduced regulatory requirements that bring safety and maintenance standards of short-term let accommodations in line with other regulatory regimes for residential accommodation. We have received feedback relating to these safety aspects and reflect summaries below.

What is working well

Safety of accommodation – Putting regulation of the sector in place through licensing appears to be improving the safety and quality of short-term let accommodation in Scotland. This is based on feedback from licensing authorities about the high numbers of incomplete applications, where out of date evidence relating to gas, electrical or fire safety has been provided or it has often taken significant time to provide evidence (indicating many hosts were not routinely meeting these safety standards either through best practice or legal requirements previously). Licensing authorities consider sight of documentary evidence is warranted and essential to ensure compliance with mandatory or additional conditions. Submission of accurate evidence also reduces the need for a site visit to be conducted, reducing costs to operators.

Scottish Fire and Rescue Service agree the introduction of short-term let licensing has been key in ensuring short-term let accommodations meet safety standards. Fire safety checks have found instances of requirements not being met or safety concerns such as: occupancy exceeding existing safety measures, unsuitable emergency exit routes, no fire risk assessments in place and issues with open plan living where there are real fires / cooking areas directly next to sleeping arrangements.

Between short-term let licensing launching in October 2022 and March 2024 Scottish Fire and Rescue Service conducted:

• 836 audits where further evidence was requested
• 594 consultations with hosts and operators to discuss measures in place
• 72 specific visits to short-term let premises to conduct assessments

Suitability of applicants - The introduction of short-term let licensing legislation is welcomed by Police Scotland, recognising the benefits it provides to protect the public. Being a statutory consultee Police Scotland carry out police checks and establish if the applicant is a fit and proper person. Police Scotland can also provide details on any anti-social behaviour or activity involving Serious and Organised Crime when an application is being considered.

Between the short-term let licensing scheme launching in October 2022 and March 2024 Police Scotland, who conduct the fit and proper person checks, has:

• submitted objections to 15 applications recommending refusal of a short-term let license.
• Submitted representations to 4 applications making licensing authorities aware of minor convictions.

Concerns that have been raised Enforcement action – Some stakeholders point to the fact that Police Scotland has not referred any short-term let licensing cases to the Crown Office and Prosecutor Fiscal Service as evidence that licensing is not required or not working as it should. Suitability of applicants – An event organiser queried why suitability checks are required for temporary licences. Data protection – It was reported that natural names were being included on a few licensing authority public registers. Other data protection concerns were raised by trade bodies and individual hosts in summer 2023 relating to the information included on site notices. This was felt to be in breach of data protection legislation and to put hosts at risk of harm.

Scottish Government response:

Safety of accommodation – We are pleased that from evidence so far, licensing is ensuring short-term lets comply with consistent standards across Scotland and appears to be improving the safety of guests. The scale of incomplete applications reported by licensing authorities emphasises that a mechanism was needed to check compliance and it is encouraging that local authorities have been able to work with applicants to resolve issues in order to grant licences.

Suitability of applicants – Licensing is about safety and checking the suitability of hosts is an important assurance for those using short-term let accommodation in Scotland.

Enforcement Action – Police Scotland and licensing authorities have received complaints about the illegal operation of short-term lets, but to date these have been resolved informally by raising awareness of licensing requirements and encouraging hosts to cease operations and apply for a licence. Some complaints have been resolved by signposting to licensing authority public registers that list applications received but not yet determined. We need to recognise that the short-term let licensing scheme is still within its transitional period for existing hosts and, while prosecution is seen as a last resort, over time prosecutions are likely to happen as circumstances warrant it.

Data protection – We take the matter of data protection very seriously. Data requested and shared on a short-term let licence site notice is proportionate, requiring only the minimum disclosure necessary for the effective operation of the licensing regime. Where there are specific concerns around the use of data, or its storage, hosts may raise these with the relevant licensing authority. Where data protection matters have been raised, we have addressed these directly with the relevant licensing authorities to ensure public registers are compliant with legislation.

Action: We will continue to monitor all aspects of safety in regards to short-term let licensing taking appropriate action where necessary. We will review our Data Protection Impact Assessment by Easter 2025, considering the outcomes of the data specification review.

6.2 Theme: Operational Practices

We set out in the scope of this report to update on the operation of licensing to date. Here we reflect the feedback we have received from stakeholders about how the scheme is working from the perspectives of those who administer the scheme, those who need licences and those with an interest in short-term let regulations.

What is working well

Awareness – There is now good general awareness of licensing requirements in the sector. Digital marketing campaigns run by the Scottish Government in 2022 and 2023, supplemented by activities undertaken by local authorities, trade bodies and other organisations such as the British Insurance Brokers Association and UK Finance has helped to embed awareness of the new licensing requirements. Knowledge is also building within the system through interaction that letting agents, conveyancing solicitors, property agents and online booking platforms have with prospective short-term let hosts. We are grateful for the time and effort that partners have contributed to raising awareness, the results of which can be seen in application levels.

All licensing authorities have information about how to apply for a short-term let licence on their websites, with guidance, checklists and contact details for the licensing team. They have also proactively engaged with applicants to inform them of need for a licence or missing evidence in applications. Some authorities have developed documents of frequently asked questions in response to enquiries.

Local authority and partner processes – Most licensing authorities are using a risk based approach to assessment of applications, confirming compliance by checking documentary evidence and only inspecting accommodation where there is a complaint or a risk is identified.

Automated systems have been developed with statutory consultees where possible to enable timely responses and effective use of resources, such as a standardised Scottish Fire and Rescue Service (SFRS) questionnaire, utilised by two thirds of licensing authorities, that hosts and operators complete as part of their applications.

Police Scotland has produced an automated system to process fit and proper person checks, which has been piloted and has the potential to speed up the turnaround of checks.

Just under two thirds (20) of licensing authorities have an automated online application process, with most providing pdf versions of application forms that hosts find helpful to review before they start.

Concerns that have been raised

Application process – Variation in the local administration of licensing has been criticised by some, as they consider this burdensome, confusing and unwarranted. They favour a central application point with one application form and a set application fee, rather than each licensing authority having different forms, licensing policies and fee levels. In addition, there are calls for the Scottish Government to remove some of the discretionary powers available to licensing authorities and to amend legislation to make them mandatory across all authorities e.g. the provision of temporary licences and temporary exemptions.

A concern aired by some individual hosts and booking organisations is that they consider applications are taking too long to process, especially for new hosts where they cannot take bookings or receive guests until they have obtained a licence. One booking organisation suggested changing to a regulatory system similar to environmental health inspections, which would allow hosts to set up short-term lets by mandatory registration with the relevant local authority followed by inspections by authorities to grant licences within a specific timeframe.

Some licensing authorities, however, have asked for the legislation to be amended to allow longer to process applications from existing hosts during the transitional phase, altering the statutory processing period from 12 to 18 months from the date applications are made. A few authorities have also suggested that the normal processing period for new hosts should be changed from nine to 12 months. The latter is sought in order to align processes with application processing times for houses of multiple occupation.

Scope and remit – There is also concern that a few authorities have set local policies that go beyond the requirements and intent of the licensing legislation. This includes specific additional licensing conditions that insert requirements already regulated by other legislation, requests for additional information (such as accommodation floor plans or annual emergency lighting certificates) or specific levels of public liability insurance (when the legislation just requires valid cover), as well as using minimum space standards defined for other purposes to determine maximum occupancy levels for short-term lets. The Industry Advisory Group has also highlighted that some information about short-term let licensing on some local authority websites is incorrect e.g. implementation dates.

In addition, the Industry Advisory Group has criticised some local authorities for siting the administration of short-term let licensing within private housing or environmental health teams instead of licensing teams. It considers short-term let licensing should be administered by licensing officials familiar with the Civic Government (Scotland) Act 1982 and its operation. An example was provided relating to one licensing authority that had included a means to submit a digital objection to licensing applications on its online public register. The group felt this exceeded the administrative remit of the licensing authority and breached natural justice.

Organisations representing bed and breakfast accommodation and guest houses have queried why the exclusion for hotels with planning permission as hotels does not also include larger guest houses that have the same planning permission as hotels.

Concerns have been raised by different stakeholders about the interpretation of various provisions within the 2022 Licensing Order. This includes:

• whether guest rooms in residential accommodation are covered by exclusions for hospitals, nursing homes and residential accommodation where care is provided
• if foster children are classed as immediate family
• how to define a single premises for the purpose of deciding which accommodation only requires a single licence; and
• what ‘in the course of business’ means particularly in relation to home swaps or exchanges

Fees – The cost of application fees have been repeatedly raised as a concern by the sector, citing that some licensing authorities have set fees above the estimated fee range quoted in the Scottish Government’s 2021 Business Regulatory Impact Assessment (BRIA)^[37]. Some have questioned whether the higher fees go beyond cost recovery and whether authorities have included an enforcement charge in the application fee, which should not happen.

The Industry Advisory Group consider that amendments to the Scottish Government non-statutory guidance to hosts and licensing authorities might address many of the concerns summarised above. They have also suggested that the Scottish Government changes it from non-statutory to statutory guidance, which would require legislative change.

Resourcing – Scottish Fire and Rescue Service (SFRS) would prefer all licensing authorities to adopt the standardised process to triage applications requiring its review, as it is successfully managing additional resourcing demands linked to the licensing of short-term lets. While most authorities have adopted triaging as part of their licence application process, not all do. A few authorities have stated it either exceeds their remit to review the questionnaire responses in order to highlight issues to SFRS or their automated system pre-dates development of the questionnaire and they do not have the capacity to do this manually.

Police Scotland voiced similar concerns regarding resourcing to conduct statutory fit and proper person checks. While the development of an automated process has the potential to greatly speed up turnaround times and to minimise the impact on workforce costs, local authorities have expressed reservation and cited IT challenges and duplication of data concerns. Police Scotland are continuing to engage with authorities to overcome these and to encourage use of the automated system.

Planning – Additional concerns have been raised around the impact that the interaction between planning and licensing may have on processing times. The Association of Scottish Self-Caterers in particular considers that, outside of short-term let control areas, breaches of planning should not be considered relevant to the application for a short-term let licence unless the breach has already been enforced or is being investigated.

Scottish Government response

Awareness – We are grateful for the time and effort that partners and stakeholders have contributed to raising awareness, the results of which are evident in the high numbers of applications received by licensing authorities in summer 2023. Over time we expect hosts, guests and communities will become more familiar with licensing requirements, as the scheme continues to embed.

Action: We have recently updated the short-term let licence marketing toolkit for stakeholders. This reflects that the transitional period for existing hosts will shortly end and existing hosts are encouraged to respond promptly to licensing authorities if asked for missing or further evidence in connection to their applications.

Application process – The licensing scheme was designed to be administered by licensing authorities based on the Civic Government (Scotland) Act 1982. It enables licensing authorities to deliver schemes that reflect local conditions and therefore ensures implementation is appropriate for the whole of Scotland. While local delivery inevitably results in some variation because each authority will have its own IT systems and processes, as well as a local policy set by its licensing committee, implementation is structured around mandatory licensing conditions and is therefore broadly similar throughout Scotland. There are existing mechanisms in place to share good practice and this has helped to standardise practices where possible.

The practice of engagement first by licensing authorities and local Police Scotland teams to engage, educate and encourage, with enforcement as a last resort, is welcomed in a new regulatory environment where prospective or existing hosts might be unaware of the requirements of operating. Their approach is supporting the sector to submit applications as required.

There is already provision within the legislation to allow licensing authorities to apply to the courts for additional time if it is not possible to determine an application within the statutory processing period. We therefore do not intend to alter the current processing timescales.

Action: We will continue to work with stakeholder groups to consider solutions to operational issues, and to encourage good practice to be identified and shared across licensing authorities and other stakeholders. These include for example the adoption of automated processes, common guidance for applicants and standardised application processes.

Scope and remit – Some local licensing policies and practices have been revised and refined since implementation began in October 2022; authorities have listened to feedback, made adjustments based on learning from the processing of initial applications or sharing of good practice by other authorities and taken account of judicial rulings in Edinburgh.

It is for local authorities to decide how they structure their teams to administer short-term let licensing.

Action: We have amended legislation to exclude foster child arrangements and guest rooms in certain residential accommodation.

We will ask the expert group to consider aspects of stakeholder concerns such as minimum space standards when it reviews and suggests changes to the Scottish Government guidance for hosts and licensing authorities. Other concerns relating to the exclusion for hotels with planning permission as hotels and the interpretation of ‘single premises’ and ‘in the course of business’ will be considered under future consultation proposals.

Fees – Licensing authorities operate the licensing scheme on a cost recovery basis.

Below, we set out the typical fee charged by local authorities at the point that the licensing system was introduced in October 2022 for common licence types and occupancy levels^[38]å. It should be noted that this typical fee is calculated as the median fee charged by local authorities for that particular fee category – this means that half of local authorities charged a fee below that level and half charged a fee above that level for that particular category. Fees are expressed on an annual basis, but are usually granted for a three year term.

Home sharing of a double room (maximum occupancy 2) – £90

Secondary letting (maximum occupancy 4) – £140

Secondary letting (maximum occupancy 6) – £152

Secondary letting (maximum occupancy 10) – £173

Secondary letting (maximum occupancy 12) – £173

In the BRIA, published in November 2021, it was estimated that the average short-term let licence fee could be between £71 and £145 per annum, depending on the approach taken by the local authority. The period leading up to introduction of the short-term licensing regime was characterised by high levels of inflation – the CPI annual inflation rate was 11.1% in October 2022. Adjusting the BRIA estimates for that level of inflation would give an estimated range for the average licence fee of between £79 and £161. It can be seen that this level is not significantly different to the typical fees for common categories of properties, as set out above.

More recently, some local authorities have revised their fees and/or fee categories in response to inflation or to reflect their experience with the licensing regime. The latest typical fees (as represented by the fee charged by the median local authority in each category) are as follows:

Home sharing of a double room (maximum occupancy 2) – £90

Secondary letting (maximum occupancy 4) – £150

Secondary letting (maximum occupancy 6) – £160

Secondary letting (maximum occupancy 10) – £184

Secondary letting (maximum occupancy 12) – £184

Although the typical fees charged by local authorities when the licensing regime was introduced were broadly comparable to the estimates included in the BRIA, there has been significant variation across local authorities around this level. It is for each local authority to ensure that their fees are set on cost-recovery basis, and they must review their license fee structures periodically to ensure this is the case. They are also accountable to local financial and auditing processes, which oversee propriety.

Action: We will continue to monitor licence fee levels and local reviews, encouraging authorities to share and consider adoption of practices that minimise costs for applicants.

Resourcing – Police Scotland and Scottish Fire and Rescue Service have both supported the introduction of regulation and licensing of short-term let accommodation, and they both have a pivotal role in the assessment of applications. The steps and approach taken by each organisation to automate and streamline processes in order to manage resources is recognised and supported by the Scottish Government.

Action: We will continue to support adoption of automated and triaging processes within the short-term let application decision process.

Planning – Licensing authorities can suspend consideration of a short-term let licence application for existing hosts for up to three months during the transitional period and can preliminary refuse to consider any applications where they consider the use of the premises for a short-term let would constitute a breach of planning control. Data obtained from planning authorities does not indicate that planning is hindering determination of licence applications.

Action: We will ask the expert group to suggest changes to guidance to consider both the licensing and planning guidance of short-term lets. We will consider how we might improve the drafting of licensing legislation to make our policy intentions clearer.

6.3 Theme: Business considerations

The introduction of a regulatory framework to the short-term let sector represents major change to the way it operates. While this change has been warranted, the Scottish Government recognises it has placed new requirements on hosts and businesses. The New Deal with Business, launched in 2023, outlined how we are working in partnership with businesses to improve the operating landscape. Central to this is engagement with businesses, acknowledging that while we will not always agree on policy interests we will remain responsive to views and concerns.

What is working well Transitional arrangements – The transitional arrangements put in place to allow existing hosts to continue to operate while their licensing applications are processed has supported the sector to maintain continuity and minimise disruption. This was aided by the six-month extension the Scottish Parliament approved, which moved the application deadline from 1 April 2023 to 1 October 2023. In addition licensing authorities have adopted a flexible approach, accepting incomplete applications and working with applicants to resolve issues.

Investment confidence – We have heard that licensing assures lenders that successful applicants will be able to legally operate as short-term lets. It was reported that as the new requirements become embedded and established, lenders will potentially have increased confidence that loans arrangements with the sector are of lower risk due to the increased regulatory scrutiny.

Concerns that have been raised Licence transfers – VisitScotland, the Industry Advisory Group and individual hosts queried why there was not a straightforward process to transfer licences, citing issues with the sales of short-term let accommodation/ businesses and the constraint jeopardising existing bookings when a new owner cannot operate until they have obtained a licence.

New short-term lets – To avoid restrictions on new investment, VisitScotland and agritourism in particular advocated for prospective hosts to be able to assure lenders that new accommodation being constructed would be able to operate as short-term lets.

Temporary exemptions – Tourism and cultural events stakeholders have voiced their views that conditions attached to temporary exemptions and restricting one exemption period per year does not provide sufficient flexibility, particularly around the time of large-scale events.

Temporary Licences – We asked whether licensing authorities should have the discretion to decide which conditions apply to temporary licences when an application for a full licence is made at the same time. Informal feedback from SOLAR and the Industry Advisory Group indicated that authorities should not be given this discretion because mandatory conditions should apply to temporary as well as full licences.

Unconventional accommodation provided by hosts – Accommodation that is provided by guests and which can be moved e.g. tents are excluded from short-term let licensing. A couple of licensing authorities queried whether this also applies where the same accommodation is provided by hosts. Feedback suggested this is not clear in legislation or guidance.

Ability to comply with mandatory conditions – It was reported that particularly in rural and island areas, it was difficult to find tradespeople to complete necessary electrical and gas safety works.

Scottish Government response

Pro-business improvements – We have legislated to enable licence holders to apply to transfer their licence to another individual and introduced the ability for prospective hosts building new short-term lets to apply for a provisional licence at an early stage, which can be confirmed when the build is complete. Hosts may also apply for up to three periods of temporary exemptions (previously one) per calendar year (combined total must not exceed six weeks).

Action: We will work with licensing authorities and the Industry Advisory Group to support commencement of provisions in the 2024 Amendment Order.

Temporary licences – We note the feedback that stakeholders do not agree with the proposal to give licensing authorities the power to decide which mandatory conditions apply to a temporary licence (where a full application has been submitted at the same time).

Unconventional accommodation provided by hosts – We note the query about unconventional accommodation. We will consider this as part of our updates to guidance.

Action: We will ask the expert group to consider this when they review the guidance.

Ability to comply with mandatory conditions – We legislated for an extension to the deadline for existing hosts, allowing an additional six months (from April 2023 to October 2023). We note licensing authorities have accepted applications from existing hosts where documentary evidence was not yet available and allowed applicants to submit this once work has been completed.

6.4 Theme: Community considerations

The introduction of a regulatory framework to the short-term let sector also brings considerable change in the way communities and neighbours can interact with the sector in their neighbourhoods. Our engagement regularly included community representation allowing us to monitor implementation of the scheme from the perspectives of communities.

What is working well Site notices – Feedback from communities welcomes the platform to have a say and make representations when a short-term let licence is applied for in their neighbourhood. When concerns are raised these are heard at local authority hearings and considered when deciding the outcome of a short-term let licence application.

Concerns that have been raised Licence types – Concerns are being raised within communities that some operators are applying for incorrect licence types, e.g. Home-sharing licence when the operator does not reside at the address.

Raising concerns – We have received feedback that some licensing authorities do not have clear processes for raising concerns with licenced short-term let accommodation or that the department within the local authority investigating a complaint is not the most suitable one.

Scottish Government response

Site notices – The need for site notices is in keeping with other regimes. While there were concerns from the sector around the information included in site notices this is also in keeping with other regimes and is the minimum information required to administer the licensing scheme. Site notices play an essential role in ensuring short-term let operations in accommodations are suitable through the benefit of those with knowledge of the immediate area surrounding the accommodation.

Licence types and raising concerns – Licensing authorities have avenues for receiving concerns regarding operation of a short-term let accommodation. Where we have received feedback about these avenues we have shared it with the relevant licensing authority. Licensing authorities should engage with an operator upon being made aware of a concerns but may pass the concern to a more relevant team within the local authority depending on the nature of the concern. Action may be taken following a concern being raised which can range from providing advice, implementing additional conditions through to terminating a short-term let licence.

6.5 Theme: Monitoring

We have been monitoring the implementation of short-term let licensing since it began in October 2022. This includes consideration of official statistics about licensing applications and other data, as well as significant engagement with stakeholders.

What is working well

Responsive action – Engagement has meant where issues have been raised, we have worked with partners to consider solutions such as sharing good practice amongst licensing authorities, engaging with trade bodies to distribute information to members and updating guidance to clarify specific points.

Evidence based decision making – Introducing short-term let licensing is providing more information about the sector that local authorities can take into account when making decisions e.g. whether to propose the introduction of a short-term let control area.

The data provided by short-term lets licensing will become part of the mix of data available to VisitScotland. This and other broader data, such as seasonal capacity and occupancy, forward bookings and booking lead times can support VisitScotland to deliver its core activities such as marketing campaigns.

Engagement – Extensive engagement was undertaken during development of the licensing legislation. This has continued during implementation, with officials and ministers meeting regularly with representative industry groups, community groups, local authorities and others to draw on the wide range of lived experience to inform ongoing monitoring.

Concerns that have been raised

Data returns – Licensing authorities have provided feedback that data reporting requirements for the short-term let licensing regime are felt to be more onerous than other licensing regimes.

Stakeholder data – Some stakeholders have indicated that whilst they are being given the opportunity to provide feedback, they do not always see resulting action which would make them feel heard.

Scottish Government response

Responsive action – Ministers welcome the opportunity to hear views first hand and appreciate the time given by stakeholders to continue engaging with the Scottish Government to monitor implementation of short-term lets licensing. This is enabling us to be aware of emerging concerns and issues so action can be taken where relevant.

Action: As well as continuing to utilise existing engagement mechanisms with industry and delivery partners, we will consider additional opportunities to engage and be responsive to stakeholder feedback, taking appropriate action where necessary.

Evidence based decision making – As section four of this report outlines, there was limited data available on the short-term let sector prior to the introduction of licensing. While new data will bring benefits we acknowledge that this needs to be balanced with the principles governing data collection to ensure it is collected and used responsibly.

Action: We will review the data specification for the official statistics with the Data Group and undertake user engagement to consider the format and frequency of future statistical publications on short-term lets licensing applications.

We will continue to monitor different indicators and work with stakeholders to understand the emerging picture about short-term lets in Scotland, as licensing embeds.

Engagement and stakeholder information – We are grateful for the time and energy that stakeholders dedicate to representing their organisations and interests. We have been pleased to make a number of measured changes, as outlined in this report and the recent statutory instrument. As we have set out we must take a responsible approach which involves listening to the range of feedback we receive and taking balanced action where appropriate. This year alone, stakeholders have met with previous and current ministers including the previous First Minister, Deputy First Minister, and ministers with relevant portfolio responsibilities for the licensing scheme, planning, and tourism (which has been overseen under another ministerial portfolio for a short period). Although we recognise that some stakeholders have wished to see further changes to the scheme, we will continue to take a responsible and responsive approach and welcome further constructive engagement.

6.6 Feedback not within the scope of this report

The purpose of this report was to reflect on initial implementation and operation of the short term let licensing regime, within the scope outlined to Parliament. We are conscious in our evidence gathering that additional information and feedback has been provided to us that falls outwith this scope - we feel that it is important to acknowledge this information, and record some general topics raised with us.

Regulatory improvement – A request was submitted to the Regulation Improvement Advisory Group (RIAG) to review whether short-term let licensing legislation could be revoked under the commitment given in the 2023/24 Programme for Government to consider obsolete regulations through the New Deal for Business implementation work.

Calls for a registration scheme – A small number of stakeholders continue to call for the licensing scheme to be revoked and replaced with a registration scheme. Three reasons are generally cited for this:

• the scheme is perceived to be damaging the tourism sector, with businesses closing rather than applying for a licence;
• licensing is considered to be unnecessary because the sector is responsible and already compliant with mandatory conditions;
• licensing authorities should be able to decide whether to have a licensing scheme similar to the arrangements for the visitor levy.

Calls for additional overprovision measures – Some stakeholders called for overprovision powers to be given to licensing authorities.

Scottish Government response

Regulatory improvement – The RIAG agreed that a review of implementation could be considered, however, it felt this should be incorporated into its longer-term work programme once implementation was more established and sufficient data is available.

Calls for a registration scheme – The Scottish Government appreciates some operators were taking a best practice approach to safety standards prior to the introduction of licensing. However, the rapid growth and breadth of the sector does not suggest this reflects all short-term lets. Section 5.1 of this report indicates that, having processed large quantities of licensing applications from existing hosts, licensing authorities consider the current arrangements to check evidence of compliance with mandatory conditions is warranted. Following the consultations outlined in this report, and resulting draft legislation, the Scottish Parliament has endorsed mandatory licensing as its preferred approach to regulating the sector.

Overprovision powers – Local authorities already have powers to address and manage the numbers of short-term lets through the designation of short-term let control areas.