Do you have a property that you currently let out on a short term basis? Do you intend to do this in the future? If the answer to either of these questions is ‘yes’ then you need to understand the rules and regulations that are coming. The new system may effectively operate on a ‘fastest finger first’ basis, so the key is to act swiftly. Brodies’ Planning Law Team is here to help.

Short term lets are not a new phenomenon in Scotland. The business of renting self-catering holiday accommodation has been a popular and thriving industry for decades.

With the rise of platforms such as Airbnb and Booking.com, and an increase in the number of units being let, the calls for formal regulation have been high on the political agenda and remain so, notwithstanding the immense impact that COVID-19 has had on tourism and leisure over the past year. 

In response to these calls, the Scottish Government intends to lay legislation before the Scottish Parliament in September 2021 for a licensing scheme for short term lets. It is currently consulting on a revised order for the introduction of the licensing scheme: The consultation is running until 13 August 2021. 

If the legislation is passed: 

  • local authorities will have until 1 October 2022 to establish a licensing scheme for their area;
  • existing operators will have until 1 April 2023 to apply for a licence; and
  • from 1 April 2024 all short term lets will require a licence to operate.

In addition to the licensing scheme, planning controls are already available. Powers contained within the Planning (Scotland) Act 2019 allow planning authorities to designate all or part of their local authority areas as “short term let control areas” came into force on 1 April 2021.

In a short term let control area, the use of a property for providing short term lets will be deemed to involve a material change of use of the dwelling house and so require planning permission. For now, there are no areas in Scotland designated as short term let control areas but the Scottish Government has just published a planning circular to provide guidance for planning authorities on how to establish a control area.

The types of premises covered by the licensing scheme will depend on the forthcoming regulations. Self-contained short term lets within control areas will most likely require planning permission. 

Planning permission for a short term let in a control area is very likely to be a pre-requisite for obtaining a licence. While the 2024 deadline for obtaining a licence may seem a distant deadline, if the numbers of existing short term lets translate into licensing and planning applications, local authorities are likely to be swamped leading to lengthy delays. 

The perceived risk is that by tying licensing to planning the system could limit the number of licensed properties in short term let control areas so that it is, in effect, a “first past the post” system. Acting now on the planning front may prevent interruptions in renting out properties in the future

The position for operators will therefore vary depending on whether their accommodation is in or out of a short term let control area, the boundaries of which could be altered in the future. Operators should watch out for any proposals to designate their area as a control area. Planning authorities will have to publish notice of any proposed control area and allow 28 days for representations to be made.

Even if not within a short term let control area, planning permission will still be required if the planning authority decide that the use of the property for short term lets is a material change of use. There are no defined principles or parameters for what constitutes holiday accommodation in planning. In the absence of a specific planning permission authorising use as holiday accommodation, operators may also seek advice as to whether:  

  1. A new or retrospective planning permission is required for short term letting (whether in the particular circumstances there is a material change of use); or
  2. No application for planning permission may be needed as there has been 10+ years of use of the appropriate nature and regularity so that use for short term letting can be said to have been established through time and therefore is lawful. 

Crucially all operators of short term letting accommodation would be well advised to navigate the new legislative framework quickly to establish what, if any, formal approval(s) is required for their property. 

According to the Scottish Government website, there are around 31,884 Airbnb listing in Scotland. The top five location ‘hot spots’ are: 

City of Edinburgh: 9,994 listings of which 6,622 are for entire homes / apartments

Glasgow City: 2,332 listings of which 1,537 are for entire homes / apartments 

City of Edinburgh: 9,994 listings of which 6,622 are for entire homes / apartments

Highland: 6,088 listings of which 3,959 are for entire homes / apartments

Fife: 1,302 listings of which 1,005 are for entire homes / apartments

Argyll and Bute: 1,932 listings of which 1,468 are for entire homes / apartments