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In September 2021, it is expected that the Scottish Government will agree the final Licensing Order for the short-term accommodation licensing scheme.

The initiative is being put in place to control the amount of secondary letting properties in Scotland, and to allow more space for residential properties. Sykes are currently working together with the Short Term Accommodation Association (STAA) to provide the Scottish Government with potential alternative solutions as part of the approval process.

Below, we look at the Scotland short-term accommodation licensing scheme and what it means for holiday let owners.

What is the Short Term Accommodation Licence?

The Short Term Let Accommodation Licence is being introduced by the Scottish Government to give local authorities in Scotland the appropriate regulatory permissions to ensure the safety and wellbeing of guests in short-term accommodation. The scheme will also aim to reduce the concerns that are currently being voiced, and better balance the amount of short-term lets compared to residential properties.

The purpose of the licence is to restrict the introduction of short-term lets in areas where it may not be appropriate, as well as supporting the local authorities in making sure that homes are being utilised in the best way for the society.

Read the consultation report for the Scotland short-term licensing scheme proposal.

What are the timelines?

Below is a list of important dates to keep in mind when thinking about the Short Term Accommodation Licence:

  • September 2021: The Scottish government will lay out the final Licencing Order (legislation) at the Scottish Parliament
  • November 2021: A final version of the accompanying documents (the guidance and updated BRIA) will be presented to Scottish Parliament and published
  • 1 October 2022: From this date (pushed back from 1 April 2022), all licensing authorities must be able to receive licensing applications. All new hosts and operators (people who have not offered short-term let accommodation before) must have a licence from this date before providing short-term lets
  • 1 April 2023: Existing hosts and operators must have applied for a licence by this date in order to keep operating
  • 1 April 2024: All existing short-term lets in Scotland must be licensed by this date

The revised timeline delays the introduction of the licensing legislation and allows time for a further consultation period over the summer. It gives licensing authorities a year from the legislation being laid to when they will have to be able to receive licensing applications. The deadline dates by which existing hosts and operators have to have applied for a licence, and be licensed, remain unchanged.

Timelines are subject to change, so be sure to check them regularly.

What does it mean for holiday let owners in Scotland?

The introduction of the licence means that by 1st April 2024, all short-term let properties in Scotland will require a licence in order to operate. It is important to note that if you own more than one short-term let in Scotland, each individual property will require a licence.

It could potentially mean that some holiday let owners will be required to make changes to their properties in order to adhere to the new health and safety regulations.

The introduction of the short-term let licence scheme may also mean that you won’t be able to start up a new holiday let in certain Scottish locations.

What properties are affected by these regulations?

In order to determine exactly which properties will require a licence, there has been clarification around the definition of a short-term let.

Definition of a short-term let

A short-term let has been defined as a property that meets the following criteria:

  • Residential – The property is set up for one or more guests to stay at the accommodation
  • Accommodation – The accommodation is either part of, or all of, a house/flat/serviced apartment, but is not on the same premises as a hotel or any other Class 7 Use Classes.
  • Temporary – The accommodation is not the residential home of the guest
  • Commercial – The accommodation is used by the host with commercial consideration (used in exchange for money/benefit for host)
  • Excluding immediate family – The guests are not immediate family members of the host, or living in the household of the host

Unconventional accommodation

Despite the above definition of a short-term let being designed to clarify the criteria, there were still some uncertainties around which types of short-term let properties will require a licence under the new legislation.

It has been confirmed however, that unconventional accommodation that is static, such as caravans and pods, will need to hold a licence to operate as a short-term let. Accommodation such as these were not included originally, due to the fact that they aren’t directly impacting on residential property development, and it could be more difficult to regulate health and safety procedures. However, an amendment was made with the reasoning that it would be inconsistent to regulate some types of short-term let and not others.

It is important to note that unconventional accommodation that is mobile, such as boats and motorised vehicles, will not be required to hold a licence to operate.

How much will the licence cost?

There is currently no information stating whether or not the licence will cost money, and how much that would be if so.

What is the application process?

Details about the application process are yet to be released, we will update once we know more.

Control Area Regulations

The concept of control areas are being introduced to help control the parts of Scotland that are experiencing higher levels of secondary letting, where it impacts the opportunity for residential housing, as well as the character of the local area.

Local authorities will be able to designate themselves as a control area.

What does being in a control area mean?

If you are looking to turn a residential property in a control area into a secondary letting property, you will be required to apply for a material change of use, which will also require a successful planning permission application.

What is the process for material change of use and planning permission?

Specific details on the material change of use and planning permission processes are yet to be confirmed.

Also note that properties that are outside of control areas may also be susceptible to these requirements, although the guidance on the circumstances on these have not yet been clarified. The Scottish Government have stated that they will be issuing guidance on this.

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*Based on a 7 bedroom property in the Lake District with bookings between October 2017 to September 2018.

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