The Future of Short Term Lets

The significant increase in short-term holiday lets within Edinburgh and throughout the country has led to the Scottish Government legislating as a means to control this element of the rental market under the Civic Government (Scotland) Act 1982 (Licensing of Short-term lets) Order 2022. While the Licensing Order was brought into force in March 2022 there remains a great deal of frustration and confusion with the legislation, not least with those in local government across Scotland tasked with navigating and enforcing the changes.

In essence the Licensing Order has been introduced to control the provision of short-term lets across our cities and towns by providing legislation which will allow local authorities to control residential tenure in their respective areas and to provide a format under which the safety of short-term lets can be monitored and controlled. The legislation should also provide a framework for neighbours to address concerns and raise complaints.

While the legislation may be viewed as a necessary control in tourist hotspots such as Edinburgh, the “one size fits all” approach to the order appears to raise more questions than it provides answers to, particularly for those short-term letting businesses that operate in a more rural setting.

So what do you need to know in relation to this new legislation?

Firstly, it is important to understand the four different types of license which will need to be in place depend on the specific situation of the property, these being:

  • secondary letting – i.e. accommodation for short-term let which is not your principal residence
  • home letting – short-term rental of your principal home when the owner is not in residence
  • home sharing – short-term rental of part of your principal home when the owner is not in residence
  • home letting and home sharing – operating short term rentals from your principal residence while you are in residence and also when you are not in residence

Should you own more than one short-term rental property, a licence will be required for each individual property (unless the property consists of multiple units under a single address).

By the 1st October 2022 all licensing authorities must provide a vehicle for receiving and processing licensing applications for short-term holiday lets. It should be noted that any new short-term lets and operators will need to have a licence approved and in place from the 1st October 2022 before their property can be offered for short-term rental.

By the 1st April 2023 all existing short-term holiday lets and operators will need to have applied for a licence under the legislation in order to be able to continue operating their rental properties.

By the 1st July 2024 all properties considered and marketed as short-term holiday let accommodation in Scotland must be covered under a license.

In September, the City of Edinburgh Council became the first local authority in Scotland to introduce a short-term let control zone which covers the whole of the local authority. This allows greater control over the development of short-term lets across the city with any existing or new short-term rental property required to attain Planning Permission or a Certificate of Lawfulness for the change of use of an entire dwelling to a short-term rental property. (This applies only when the property is not the main residence of the occupants).

Any Planning Permission requirement for a property will need to be in place and evidenced in order for a subsequent licensing application to be submitted and processed.

Applying for a License

License applications will need to be directed to the local licensing authority generally through an online application process. In order to submit application, a variety of supporting information will be required including (but not necessarily limited to):

  • the type of licence that is being applied for
  • confirmation of the property owner
  • evidence of all relevant health and safety information, certification, insurances and other relevant documentation such as confirmation of Planning Permission
  • details of any third party/agent through which bookings are made

So what is the best advice on the introduction of the Licensing Order?

In short, don’t ignore the requirements to attain an appropriate license for your property, this legislation will not be going away.

While all existing operators still have time to prepare and submit their applications ahead of the final deadline of April 2023, the introduction of a control zone across the whole of Edinburgh will more than likely require you to have Planning Permission for change of use to be in place before applying for your license; a further application process which could add months to your timescales for getting your license in place.

And finally, if you are still unsure of what applications you need to make and by when, seek advice from suitable professionals whether they be solicitors, agents, architects or partners as soon as possible and they should be able to guide you through the myriad of the legislation.