Short Term Lets

The Royal Town Planning Institute (RTPI) is the champion of planning and the planning profession. We work to promote the art and science of planning for the public benefit. We have around 2,100 members in Scotland and a worldwide membership of over 25,000. RTPI Scotland’s members represent both the public and private sector interests and will in large part be responsible for the successful implementation of the proposed new legislation as it impacts on planning procedures and enforcement activities, working collaboratively with other service colleagues in local Councils responsible for the licensing requirements.

Background

Short-term lets have become the subject of controversy in different parts of Scotland and their impacts tend to evoke strong opinions for and against. To respond to the key issues being raised the Scottish Government has carried out a wide range of workstreams to establish facts and opinions from a variety of sources including, setting up an external panel, earlier consultations, independent research, and also set up a short term lets delivery group. There have also been extensive discussions in the Scottish Parliament to Ministerial statements and during the stages of the Planning Bill.

An earlier consultation was held in  in April 2019  2019 consultation paper and the paper was supplemented by a research Annex, ‘The Short-Term Rental Sector, Housing and Tourism in Scotland’, providing an overview of the available evidence on short-term lets in Scotland and regulations introduced elsewhere in the world. RTPI responded in full at that time.

The research highlighted a number of positive impacts of short-term lets on communities, including local economic benefits associated with tourism and increased household income for hosts. However, the research also confirmed that negative impacts on communities’ quality of life, reduced availability of residential housing and increased strain on local public services were among the key negative impacts.

For many, short-term lets using Airbnb and similar platforms have enabled cheaper, more flexible travel, but others – particularly in tourist hotspots, like the centre of Edinburgh, and Skye – are concerned they make it harder to find homes to live in. 

Subsequently, in January 2020, SG announced plans to establish a licensing scheme for short-term lets using powers under the Civic Government (Scotland) Act 1982 and give local authorities the power to introduce short-term let control areas under powers in the Planning (Scotland) Act 2019.

The Scottish Government (SG) has now issued a further consultation paper on regulating short term lets on 14 September 2020 and the deadline for responses is Friday 16^th October 2020.

What are the SG policy objectives behind the issuing of the Consultation Paper?

Following consideration of previous consultation responses and the evidence provided by independent research, the SG has announced it will:

• introduce licencing for short-term lets, under the Civic Government (Scotland) Act 1982, with a mandatory safety component which will apply to all short-term lets across Scotland. Local authorities will also be given the discretion to put in place further conditions.
• prioritise work to give local authorities the power to introduce short-term let control areas under powers in the Planning (Scotland) Act 2019.
• undertake a review of the tax treatment of short-term lets, to ensure they make an appropriate contribution to the communities they operate in.

It is anticipated that these new measures will be introduced from April 2021 and will include,

• a new mandatory safety requirement covering all types of short term lets to ensure a safe, quality experience for visitors.
• discretionary powers to Councils to apply further conditions to address local residents’ concerns
• control areas can be designated by Councils to ensure that planning permission will always be required for change of use
• the taxation of short term lets will also be considered

Transition arrangements for Councils will also be introduced in April 2021, and RTPI welcomes the intention to produce separate guidance documents for local authorities and hosts.

The timescale for this consultation paper is relatively short and interestingly there are no individual or specific questions to respond to, as is the normal practice for an SG consultation paper. Comments are sought which will assist the SG in getting the details correct. In particular, SG are not consulting on whether to implement a licensing scheme or control areas nor the broad framework of the approach.

Context

Airbnb is one of the largest providers of short- term holiday lets and it states that in 2019, 2.5 million visitors travelled to Scotland using Airbnb, generating approximately £700 million of economic activity. Research commissioned by the Scottish Government found in May 2019 that there were just under 31,900 active listings on Airbnb and 69% of these bookings were for whole properties.

RTPI Response

RTPI is well aware that the issue of STLs has been controversial in Scotland, and indeed in other countries. There are advantages for tourists and visitors and the overall tourist economy in terms of availability of cheap, alternative accommodation.

RTPI appreciates that there are different views expressed by Councils across Scotland depending on the concentration of short term lets in specific geographical concentrations in cities and the incidence of STLs in remoter and smaller communities, where there is a real need to support and encourage the local tourism industry.

RTPI previously expressed concerns in earlier consultation responses on several aspects of short term lets legislation and licensing affecting including,

• major concerns about the resource implications of changes to the regulatory framework
• the related impacts associated with the additional duties for local councils set out within the Planning (Scotland) Act 2019 which remain uncosted
• the overall financial context of diminishing resources in Councils, both staff levels and fee income streams
• the need for effective enforcement measures and joint working across several Council services
• a clear and simple set of procedures with limited data requirements

These earlier over - arching concerns remain and RTPI would like to see further clarification from SG on how the legislative processes are intended to be effectively resourced and monitored.

Additional concerns remain about the demands on the planning system to control unsuitable changes of use and the volume of complaints anticipated from local residents. The checking and monitoring systems will have to be comprehensive if they are to be successful and suitable transition arrangements will need to be put in place.

RTPI understands that the review of tax treatment for STLs is being progressed separately and is not within the scope of this consultation exercise. Nevertheless, this is an important related point in relation to overall costs and resourcing for local Councils.

We consider that the proposals set out by SG are comprehensive, and well thought out, based on thorough research and wide consultation. It is especially important that the new procedures offer both uniformity across Scotland, but also retains the ability for Councils to apply local flexibility. RTPI supports the statutory registration of short term let accommodation and also supports the ability of Councils to designate local control areas.

Properties

RTPI is particularly pleased that the proposed licensing scheme covers all properties offered as short term lets, regardless of the timescales involved, and regardless of whether the let is part of or all of a person’s home or a secondary let being used solely for that purpose.

Licence Conditions

We also support the introduction of the standard, mandatory 16 license conditions set out in Annexe A. These correctly concentrate on health and safety requirements covering gas, electrical and carbon monoxide safety, as well as insurance and mortgage compliance.  This appears at first to be onerous but the requirements are the minimum required to guarantee the safety of residents. We remain concerned however that 10 of the conditions to be applied are self- declaratory, including obtaining planning permission and only 6 require formal verification.

Definition of a Short Term Let

RTPI agrees with the definition being proposed by SG at Paras 4.1-4.13.  It has to be fair and precise and we believe that SG has struck the correct balance.

Control Areas

We support the ability for local Councils to designate all or part of their area as Control Area. There are many areas across Scotland where there are heavy concentrations of STLs and this can place excessive demands and burdens on both the Council and local residents and communities.

RTPI also supports the need for revocation of planning permission after 10 years or a shorter period if set by the local authority, to retain control over the numbers and extent of STLs in an area. We strongly support the removal of Permitted Development Rights (PDR) within a Control Area. PDR currently allows a dwellinghouse to change to secondary letting for up to 28 days.

The process envisaged is similar to designating a conservation area, where similar effects in making planning permission mandatory for certain developments. Consultation needs to take place and has to be notified to Ministers for approval.

Fees

Fees can be charged by local authorities to cover the establishment costs and running costs involved, but these will not be set by SG. Local authorities can include costs for setting up the systems, staff training, processing applications, and renewals, site visits, handling complaints and other monitoring and enforcement costs. RTPI feels it is important that any additional workstreams affecting planning activities and resources need to be fully costed and included in the fee charges. This is obviously separate from planning fee charges for any required change of use. 

Any fees generated should be ‘ringfenced’ to cover the full costs of the planning authority undertaking this work.  Research^[1] undertaken by RTPI examining the costs of introducing the new duties of the Planning (Scotland) Act 2019 estimated that a planning authority designating all or part of its area as a short-term let control area could cost up to £14.8m over ten years.  This increase in demand for planners comes at a time when there is a diminishing resource base with planning authorities’ budgets decreased in real terms by 40.8% and staff numbers cut by 25.7% since 2009.  Development management and development planning functions only made up 3.2% of local authority net revenue budgets in 2019.

Conclusions

In his foreword to the consultation paper the Minister for Local Government, Housing and Planning said that he believes that the proposals set out take a robust but proportionate and fair approach to the regulation of short term lets and RTPI agrees with his overall assessment.

We are happy to support the three-pronged approach being adopted in the high-level policy purpose affecting licensing, planning and taxation interventions.  Individual Councils are best placed to provide responses and comments on the finer points of detail set out in the paper but RTPI is happy to support the approach being adopted and the measures proposed.

Every licence application has to confirm that planning permission (if required) has been obtained or applied for, that it remains current and all planning conditions are being complied with. As the paper acknowledges there is no clarity on what planning permission is required as it is a “case by case consideration”. This will inevitably put additional workload strains on local councils.

Overall, we believe that the correct balance has been reached between an over - prescriptive and onerous system and a light touch, ineffective approach. The associated guidance documents will need to set out the procedures in more detail as we have concerns that the continuing uncertainty about the planning status of short term lets will continue to cause problems and disputes.

However, there is a need to recognise the cumulative impact of the resource implications of introducing these new provisions, particularly taking account of the effects of the COVID-19 pandemic allied with the additional workload burdens stemming from other areas of planning reform.  

Contact

The RTPI is happy to discuss these comments directly with the Scottish Government and provide any clarification necessary.  Please feel to contact [email protected] or by phone on 0131 229 9628 or 07850 92688 if you wish to do this.