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Edinburgh [Kate Bielinski on Unsplash]

Scottish Government proposes licensing scheme amendments

UK: A consultation period ends today [29 May] on proposed amendments by the Scottish Government to the holiday let licensing scheme that came into effect in October 2023.

According to a Scottish Government press release, the proposed amendments, as part of the Civic Government [Scotland] Act 1982 [Licensing of Short-term Lets] [Amendment] Order 2024, would provide “technical” updates to the short-term let licensing scheme. If approved, the new regulations would enable:

  • Licences to be transferred to a new host, such as when accommodation is sold
  • Prospective hosts building a new short-term let to apply for a provisional licence before construction is complete
  • Hosts to apply for a maximum of three licence exemptions, allowing them to host for up to six weeks per calendar year without a licence

 

Licensing for short-term holiday lets in Scotland was introduced in 2022 initially to provide assurance to guests on safety and quality, such as gas and electrical safety compliance and the suitability of hosts, according to the government.

The proposed amendments must still go in front of the Scottish Parliament, while there are also technical clarifications to exclude foster care and guest rooms in certain residential accommodation from licensing requirements.

Speaking earlier this month, Scotland’s Minister for Housing, Paul McLennan, said: “Short-term let accommodation offers safe and high-quality places to stay throughout Scotland and plays an important role in supporting our tourism sector.

“Since we introduced the licensing scheme I have continually engaged with operators and the wider tourism industry to understand how it is working. These regulations are in response to, and have been refined through, that engagement.

“If passed by the Scottish Parliament, the regulations will support new businesses through the timely transfer of licences between operators and the consideration of new short-term lets at an earlier stage of their development.

“This will ensure that the licensing scheme continues to deliver quality and safety assurance for guests, whilst protecting the needs of local communities,” he added.

The UK Short Term Accommodation [STAA] acknowledged the changes as a step in the right direction, and the result of hard work on advocacy in Scotland.

Andy Fenner, CEO of the STAA, said: “Scottish Tourism supports thousands of jobs though small businesses across the country. Families are booking their summer holidays now, and they need to know that Scottish holiday let tourism is open for business & ready to give them a fantastic holiday.

“The UK Short Term Accommodation Association [STAA] is working with the Scottish Government to support tourism & ensure fair, proportionate regulations. The new SSI is a step in the right direction.

“The STAA welcomes the Scottish Government’s efforts to collaborate with us on recent amendments to tourism regulations. While we offer qualified approval of the new Statutory Instrument [SSI], we are calling for further improvements to support the sector more effectively.

“These amendments address some overly restrictive aspects of the previous regulations, offering a more balanced approach. Our members are committed to regulation that ensures the security of their businesses and the safety of their guests, but it is essential that these regulations remain fair and proportionate. The Scottish Government’s willingness to work closely with the industry is a positive step towards achieving this balance.

“One significant amendment is the introduction of licensing exceptions for up to six weeks a year. This change will greatly enhance Scotland’s ability to host world-class events like the Edinburgh Festival and Glasgow’s COP.

“During the summer high season, when international tourists flock to Scotland, certain destinations require significantly more accommodation than at other times of the year. This adjustment acknowledges the crucial role holiday lets play in sustaining Scotland’s reputation as a premier tourist destination.

Now is the time for us to work together to bolster Scottish tourism. We look forward to continued collaboration with The Housing Minister Paul McLennan MSP, his colleagues in business, tourism and the Scottish Government.

“Our goal is to develop a regulatory framework that supports both businesses and communities, and fully recognises the holiday let sector’s vital contribution to the Scottish economy,” he added.

However, Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers [ASSC], said that the amendment “falls way short of what is required to help existing self-catering owners survive and thrive into the future”.

Campbell said: “It provides little more than minor tinkering around the edges rather than the positive change necessary for a key component of Scottish tourism that boosts the economy by £1 billion per annum.

“Industry engagement has to be more than a tick-box exercise; it must produce demonstrable action if the Scottish Government’s New Deal for Business is to mean anything at all in practice. We have repeatedly warned government of the dire impact of its onerous approach, highlighted streams of data to better inform policy, as well as supplying mutually beneficial regulatory solutions to overcome outstanding challenges but sadly to no avail.

“The ASSC has requested a meeting with the Cabinet Secretary for Economy and we will recommend that the amendment is withdrawn until she has fully engaged with industry on this matter.

“Pushing up the cost of holidaying in Scotland, squeezing the supply of accommodation for our world-leading Festivals and other major events, burdening resource-stretched local councils, and hammering small and micro businesses surely cannot have been the policy intention of short-term let licensing but that’s what is playing out on the ground. Disturbingly, there’s now evidence of a burgeoning black market.

“There has to be real, tangible change otherwise more small indigenous Scottish businesses will close, it is as simple as that,” she added.

According to Edinburgh Live, Edinburgh Council faces a backlog of over 1,600 short-term let applications, while a recent report in The Daily Mail suggested that at least 1,000 self-catering homes had shut down since the licensing scheme came into effect in October last year.

Meanwhile, Scottish Government data shows that just 23,500 applications were submitted for short-term let licences [STLs] by the end of 2023, of which there were 11,000 secondary lets [self-catering businesses], although the government has publicly cited 32,000 STLs in Scotland.

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