30 Aug 2021
By Natalia Bell, Solicitor at Blackadders LLP
Short-term lets (STL) have significantly increased in popularity throughout Scotland in recent years, particularly in popular tourist destinations such as Edinburgh and the Isle of Skye.
Airbnb is considered to be one of the largest platforms for STL and provide a source of published data highlighting the distribution of STL across Scotland. Whilst it is acknowledged that there are several other platforms similar to Airbnb offering STL, it is an important market player and any figures published in Airbnb’s data may be a conservative estimate of the total number of STL operating across Scotland.
Part of the reason that the precise scale and scope of the STL industry in Scotland is largely unknown is that there is currently no requirement to register STL with any Local Authority in Scotland (albeit there is a proposal for properties to be licenced from 2024 and a blog will follow shortly in this regard).
Given its tourist draws and various international festivals, the City of Edinburgh has the highest number of properties being used as STL. Data published by the Scottish Government shows that in 2019, 31% of all Airbnb listings in Scotland were located in the City of Edinburgh, followed by 19% in the Highlands and Islands and 7% in Glasgow City.
With indications that demand will continue for STL, the City of Edinburgh Council have initiated a consultation period outlining a draft proposal to designate the whole of Edinburgh as a STL control area.
If the Council give the go ahead and the proposal is approved by the Scottish Government, new powers will require all residential properties in Edinburgh, which are not an owner’s main residence and are being used as a STL, to obtain planning permission. This is because the use of a property for the purpose of operating a STL is considered to be a ‘material change of use’.
This is not a blanket ban on properties being used as STL. Instead, all properties that want to operate as a STL will be brought under planning control. The Council will then consider whether change of use of a property would be appropriate considering both the Local Development Plan and other material considerations.
However, in a positive move for those who have been operating as an STL landlord for some time, it is proposed that planning permission is not required in circumstances where a property has been operating as a STL for more than 10 years, providing no enforcement action has been taken during that time.
The proposal to designate Edinburgh into a control area aims to help manage high numbers of secondary lettings which affect the availability of private residential housing, including the availability of private residential tenancies, the character of the neighbourhood, tackle issues with properties being used for inappropriate purposes and address noise and anti-social behaviour.
What is a short-term let?
If the Councils proposals are approved by the Scottish Government, the properties that will be affected are those that satisfy the following criteria:
It should be noted that the proposal to designate Edinburgh as a control area would not impact upon owners letting out rooms in their property or affect owners letting out their entire property where the property is the principal home of the owner and the owner is absent (for example, on holiday).
What will be considered?
As outlined above, when a planning application is made to the Council, the Council will consider whether or not planning permission will be granted.
In making this decision, the Council will consider Edinburgh’s Local Development Plan unless material considerations indicate otherwise. Essentially, the Council would consider each application on a case-by-case basis and consider any local policies that may exist at the time of the decision.
The current Local Development Plan contains guidance which controls change of use and states that “change of use, which would have a materially detrimental effect on the living conditions of nearby residents, will not be permitted.”
It is proposed that applications for change of use of a property from residential to STL will be assessed in terms of the likely impact on neighbouring properties. When considering whether an application for change of use should be approved, the Council would consider factors such as:
The process of requiring owners to apply for planning permission would also involve notification to neighbours and would provide the public with an opportunity to make representations.
If you need advice in relation to the proposed changes outlined above, even if you’re just thinking of renting out a property as a STL, please contact a member of the Blackadders’ Commercial Property team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth and across Scotland.
