Level playing field for short-term letting rules
Not before time, it looks as if the talking is almost over and the Scottish government is about to act to end or at least ameliorate, the inadequacies and inequalities related to shortterm residential property lettings.
Consultation on the issue will eventually end on 13 August, after which final legislation is likely to be presented to the Scottish Parliament for approval in September.
Within the ground rules set by the government, councils will be given freedom to operate the legislation in a way that is best suited to their respective local circumstances. Hiring of officers is likely to be necessary and this will partly be paid for by fees paid by property owners related to licensing of properties.
Under the proposed legislation, local authorities will have until 1 October 2022 to establish a licensing scheme, with all shortterm lets to be licensed by 1 April 2024. Existing hosts and operators must apply for a licence by 1 April 2023.
The legislation has been described as a “crackdown” on Airbnb and other shortterm lettings, most of which are to tourists, but it is nothing of the sort. All it does is create a level playing field which will require property owners who engage in short-term lettings to operate under the same rules, and to the same standards, as landlords who provide homes for private rent.
Properties let long-term are subject to a number of conditions intended to protect tenants and those living around them, mainly relating to supplies of gas, electricity and water and the general fabric of a building.
In addition, a landlord must register with the local authority, which will check whether the landlord is a fit and proper person, while a prospective tenant is able to search the Scottish landlord register. A similar process exists for Houses in Multiple Occupation (HMO), which require a licence.
As the current Scottish government prelegislation paper points out: “The only mechanism the average (short-term) guest has to find out about the accommodation is peer review on platforms. Even assuming the reviews are authentic, peer review tends to be focused on quality of experience rather than safety. While there is some overlap between quality and safety, most guests will not have the time, inclination or skills to examine or comment upon safety features”.
Lack of regulation and the money-making potential of short-term lets tempted many landlords to switch from the conventional market, particularly in tourist hotspots like Edinburgh during the summer months.however, this inevitably led to a reduction in the availability of private accommodation for long-term use and the law of supply and demand inevitably led to rental costs moving upwards.
Then came the pandemic in March of last year and the tourist market collapsed. As a result, most short-term landlords tried to return to conventional lettings market, but in many cases their hopes of an income were dashed as tenants started losing their jobs. The rental market has been particularly hard hit by the pandemic, given many occupants work in hospitality and other sectors which have been – and in some cases still are - badly affected by lockdown.
Now, however, visitors are returning. Consequently a drift back to short-term lettings is inevitable but the difference is that every operator will subject to the same conditions, creating a balance that was seriously lacking in the past. David Alexander is MD of DJ Alexander