Short-term lets: what next?

10 minute read

The problems caused by the rampant expansion of short-term letting in Edinburgh are by now well known. Since launching my #HomesFirst campaign in November 2017, I have been arguing for proper regulation of this activity.

During this time, I have spoken with people who no longer have any permanent neighbours. I have listened to owners of short-term lets who rely on the income to supplement their pension or wages. Along with other Edinburgh MSPs, I have written to the Scottish Government to ask them to act. I have made attempts to amend legislation to help combat the problems experienced by my constituents. During the pandemic, I have tried to amplify the concerns of those constituents about short-term lets with shared entrances continuing to operate.

So I am pleased that the Scottish Government is now consulting on regulations relating to control areas and licensing of short-term lets.

You can read the consultation document here: https://www.gov.scot/publications/short-term-lets-consultation-licensing-scheme-planning-control-areas-scotland/

And respond to the consultation here: https://consult.gov.scot/housing-services-policy-unit/short-term-lets-licensing-scheme/

The deadline for responses is Friday 16th October.

In this blog I will discuss the Scottish Government’s proposals as regards short-term lets, as well as some of the weaknesses in the plan. At the end of the blog is a link to my consultation response.

What do we mean by “regulation”?

The proposals in the consultation cover two important regulatory processes – licensing and planning. Put simply, licensing is a process whereby individuals are licensed to carry on certain activities such as operating a taxi or selling alcohol. In this case, the proposal is to give local authorities the powers to license the operators of short-term lets and the consultation sets out a series of questions about how this might be done.

Planning, on the other hand, is a process whereby planning authorities regulate the use of land and property. In this case the planning reforms involve how to establish short-term let control areas – zones within which any short-term let will require to have planning consent.

In short, planning is about whether a property can be used as a short-term let and licensing is about ensuring that the operator of any such premises is a fit and proper person who has the appropriate safety and other measures in place.

The consultation is not about the principle of these two regulatory measures but about the detailed content of each. Thus it is quite technical but detail is important.

On the whole, the plan is comprehensive and well-thought out. Of course, all of this is subject to the consultation, but it is likely that the following will come to pass.

Planning control areas

The Scottish Government plans on allowing councils to designate short-term let control areas. Unlike the failed rent pressure zones, they will use a tried and tested process along the lines of establishing conservation zones. You can expect that some councils will be very quick off the mark in requesting these control areas.

What will those control areas mean? Within a control area, short-term lets must have planning consent. No ifs, no buts. Of course, it has been my position all along that operating a dwellinghouse as a commercial business should always require planning consent. Within control areas, the situation will now be crystal clear.

Short-term let licensing

Short-terms will now be subject to local authority licensing. The consultation document is clear:

“All short-term lets will require a licence.”

From April 2021, local authorities will be able to introduce licensing schemes. All local authorities must have a scheme in place by April 2022. There will be both national conditions and local conditions of holding a licence. Local authorities can apply conditions to all short-term lets in their area, to some short-term lets (e.g. in tenements) and to individual licensees.

Short-term lets will have to be in good repair. They must be certified safe when it comes to fire, gas, electricity, legionella and carbon monoxide. The licence must be displayed in the accommodation. The licence number should be included in online listings. The consultation document mentions various other conditions that local authorities could apply locally, relating to anti-social behaviour, noise, greeting guests, litter and data collection. Local authorities will collect application fees as well as annual monitoring fees.

Operating without a licence or breaching licence conditions will attract fines of between £200 and £50,000.

Finally, if the short-term let requires planning consent, that will be a mandatory pre-condition of holding a licence.

Key issues

This is all extremely welcome.

However, there remain some key issues that need to be tackled

First, it does little in the way of directly combating the number of short-term lets. The root problem of commercial short-term lets operating in the numbers that we have seen in city centres is that they take homes away from the housing supply. It is vital therefore that the City of Edinburgh Council adopts planning policies, ditched in 2011, that prioritise use of housing for homes – the #HomesFirst approach.

Second, licensing is welcome but it is not a panacea. I hope that the energy of short-term let campaigners will mean a greater degree of scrutiny is brought to bear on short-term let licensing than in other areas. I know from my casework as an MSP that residents who wish to object to houses in multiple occupation (HMOs), for example, often face a long uphill battle.

Third, the grace period – the time between a local authority establishing a licensing scheme and short-term let operators needing a license – is up to 2 years. Many residents of short-term let hotspots already feel like action has been slow. It will be up to councils to speedily implement a licensing scheme.

Fourth, planning enforcement is an overlooked but important mechanism for combating problems like short-term lets. Planning teams have been subject to large cuts to their budgets in recent years. Checking whether planning control has been breached takes time and resources: visits to the property, desk research, processing reports from neighbours, identifying and contacting the owner.

Fifth, I am pleased that local authorities will have to maintain a register of licensed hosts. It is not clear whether this register will be open to the public, like the HMO register, or with limited access, like the landlord register. It is not possible to use the landlord register to view a list of properties owned by a particular person. That is not transparent. I believe it is in the public interest to be open about property ownership, whether rented to permanent tenants or to short-stay guests.

Sixth, another pitfall of licensing regimes is false licence numbers. Each short-term let licence holder will be issued a unique number, which should be displayed on accommodation booking platforms. Those platforms will not check the accuracy of those numbers. There is no process for local authorities to check the multitude of platforms for fake numbers.

Other countries that have introduced short-term let licensing schemes have experienced this problem. Without a way of compelling accommodation providers like Airbnb and booking.com to check that license numbers are real, fake numbers will abound. I hope that action against short-term let owners who operate without a licence will be swift and thus an effective deterrent.

A final note

Short-term let owners have often felt under attack from campaigners in this area. I myself have been the subject of some scathing press releases from the industry body. I take no issue with any responsible short-term let owner who manages the behaviour of their guests and is considerate of their neighbours. However, the sheer number of short-term lets in areas such as Edinburgh, Skye and the East Neuk has had serious consequences for the local housing markets. Folk who want to live where they have always lived, or move to an area for work, have been priced out.

Additionally, many short-term lets in Edinburgh are not owned by individual operators supplementing an income or pension. They are owned by large companies, sometimes registered overseas. Money has been extracted from local economies for years. City centres have been hollowed out. Rural families have struggled to find affordable accommodation.

I am glad that the Scottish Government acknowledges the problems associated with short-term lets and is taking steps to address them. The Housing Minister says they have “worked quickly to develop detailed proposals”. That is half right: the proposals are detailed, but they come very late in the day.

Please do respond to the consultation by Friday 16 October.

You can read my detailed consultation response here.

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