Striking a balance on holiday lets
Holyrood is currently consulting on licensing orders and guidance in relation to short-term lets, writes Mark Mcmurray
Whatever you may think of the rise of shortterm holiday let properties, there is growing consumer demand for this type of accommodation, especially as stay at home breaks enjoy increasing popularity in the UK.
Short-term letting platforms have certainly experienced significant growth in recent years amid an increasing demand for private accommodation with an estimated 150 millionpeople currently using the ai rb nb website alone. Meanwhile in the UK, summer booking sin short-term rental properties have been 36 percent higherthis year compared to the same period in 2020.
The rising popularity of short-term lets has significantly impacted property markets in popular tourist destinations, including Edinburgh and the Isle of Skye, affecting some local communities and their amenities. This has resulted in impending regulation of the sector in Scotland where it will be important to strike the right balance to support an industry which has been under strain over a sustained period.
The scottish government is currentlyconsulting on a draft licensing order in relation to short-term lets and associated draft guidance. Once approved, this licensing order will sit alongside planning legislation which came into force in april 2021 and associated planningguidance which was published at the end of June.
The planning legislation gives local authorities the powers to designate all or part of their areas as a shortterm let control area, within which the use of a property for short-term lets will require planning permission. All short-term lets in Scotland will also need to be licensed, regardless of whether they require planning permission. The licensing order proposes a number of mandatory conditions, including requirements for fire safety equipment, annual gas safety inspections and limits on maximum occupancy.
Hosts of short-term lets are therefore likely to face differing regulatory requirements depending on where their property is located in the country. The scottish government has however proposed template additional conditions on various topics to reduce inconsistencies across the nation.
Short-term let property owners will have time to become familiar with the requirements before requiring a licence. From October 2022, all existing hosts will have until March 2024 to obtain a licence. They can continue operating in the meantime provided they successfully apply for a licence by April 2023.
With the publication of the licensing order, we now have a good idea of how both the planning and licensing systems will operate. However, it may be the standard conditions published by individual authorities that are of greatest importance. This detail will follow the legislation but it is only once we see the conditions and policies that we will have a better idea of whether each area has struck the right balance.
As we emerge from the pandemic, cities,regions and nations will be vying to be the destination of choice for tourists. Scotland, which enjoyed its best year in a decade for overnight tourism in 2019, is well-placed to capitalise on further growth.
Studies also suggest that the popularityof short-term rentals is likely to have increased as a result of the pandemic.
This isn’t surprising as they can offer guests their own dedicated accommodation, where they don’t have to be mindful of physical distancing, and other benefits such as independence and flexibility.
The Scottish Government has recognised that short-term lets can play a significant role in supporting additional tourism and the associated economic benefits. Conditions and policies which make it difficult for hosts to
operate could however see Scotland lose out in what is likely to become an increasingly competitive market.
On a positive note, the gradual introduction of the new regulations will allow hosts to adjust before being subject to regulation and hopefully provide the industry time to rebound before the measures are in effect. Mark Mcmurray is a Partner and hospitality sector specialist at CMS