Short Term Lets
Short Term Lets - Scottish Govt and City of Edinburgh Council clarify positions.
A year after the new law was passed, and after months of discussions, stakeholder meetings, draft policies, not to mention a hearing and subsequent Judicial Review in the Court of Session of the City of Edinburgh Council’s policy, The Scottish Government this week voted in its final debate on the matter to confirm that the 1st October deadline will stand.
In short, any owner still operating a short term let property in Edinburgh, which includes Airbnb, Festival flats, holiday lets etc, after the 1st October, and hasn’t applied for both planning permission and a ‘Short Term Let Licence’, will be committing a criminal (note, not ‘civil’) act.
This page will look at the items affecting STL owners who let their whole property out as a Short Term Let, including holiday letting, festival letting, via AirBnB, Booking.com, self-managers, etc.
Short Version First
The Scottish Government’s requirement for all STL owners to hold or have applied for a STL licence by the 1st October 2023 will stand, and not be extended. The City of Edinburgh Council’s policy has been updated (Click Here to View) to remove the previous ‘unlawful’ elements and re-issued, meaning owners must apply before 1st October too, and must hold or have applied for a ‘change of use’ planning permission prior to applying.
There is no longer a ‘rebuttable presumption’ against the grant of a licence in the licensing departments’ policy, but the planning departments’ guidance notes (see here) still stipulate that a ‘change of use’ application for a property in a communal stair is ‘very unlikely to be supported’.
There is a caveat to this in that the planning department should issue a ‘Certificate of Lawfulness’, in lieu of planning permission, if the owner can prove that they have been operating the property continually as a STL for more than 10 years. Real evidence must be supplied such as accounts records from a bookings site (e.g. TripAdvisor, Airbnb, etc).
In More Detail
Our previous blog (here) provides some context as to the events prior to this update.
However, on 21st July 2023, Paul McLennan MSP, Minister for Housing, wrote to Fiona Campbell, Chief Executive of The Association of Scottish Self Caterers (ASSC). A full copy of the letter can be read here.
In it, Mr McLennan confirmed that the Scottish Govt will not extend the timeframe beyond 1st October 2023 and generally re-confirmed that the law would proceed as outlined without further amendments. He also covered all of the points which had been raised by the ASSC against the legislation. This included confirmation that the outcome of the Judicial Review which highlighted unlawful elements within the City of Edinburgh Council’s policy, had been discussed and shared with all other local authorities across Scotland.
The letter also repeated the legislation’s position of delegating the licensing of STL’s to each Local Authority and leaving it to each one to decide its own interpretation and implementation.
The legislation was debated in Holyrood earlier this week on Wednesday 13th September, and the result was that the legislation was confirmed as laid down before the Scottish Parliament. In other words, it’s happening, and it’s happening on 1st October!
The City of Edinburgh Council had previously issued a policy which had been challenged in the Court of Session as noted above. The council has now revised its policy to remove those elements, but all other items are broadly the same.
The main point for STL owners in Edinburgh to be aware of is the designation of the city as an ‘STL Control Area’. This means that any property within the Council’s area wishing to obtain a STL Licence must firstly apply for, or have been granted, planning permission for a ‘change of use’. The Judicial review (see here) noted that it isn’t within a licensing authority’s powers to decide whether a change of use should be granted, but it did confirm that this decision rests with the planning authority. And herein is the main stumbling block for any owner with a property situated in a tenement, or block of flats, or where there is at least one other owner sharing the communal entrance door or stair, as the planning guidance explains that planning permission application is such cases are ‘very unlikely to be supported’.
This means that most STL owners of flats or properties in communal stairs will not be granted planning permission and will not therefore be able to gain a STL licence. In Edinburgh, the cost of a planning permission application for a typical 2-bedroom flat is c. £600, and the STL licence fee for the same flat is £1,089.
There is nothing to stop an owner applying for both and then awaiting the council’s decision, as owners can still operate until their applications are decided. But realistically, this would effectively be gambling £1,689 and hoping it isn’t decided for some time as both fees are non-refundable.
If you are still considering this route then it is recommended to not leave it too late as submitting a planning application is a detailed process, requiring an account on the www.edevelopment.scot website, and numerous pieces of documentation, scale plans and drawings etc.
Options???
However, given the planning barrier, many owners will likely need to consider other options. For most owners this is likely to be a choice of either selling or switching to long-term letting.
The housing and rental markets are seeing huge demands from buyers and renters, so owners may find these alternatives more palatable than they expected. And those buyers and renters will likely welcome the increased possibility of securing a new home.
At Cullen Property, we’re seeing an increase in STL owners using our free rental valuation service https://valuation.cullenproperty.com/ as they weigh up their options. This free and instant rental valuation tool will tell you what your property might achieve in the very buoyant rental market.
The stark reality of the new regulations will cause a shift in how the estimated 6,000 – 10,000 affected properties are used post 1st October 2023, and the longer term effect on the sales and rental markets, and not least the Edinburgh Festivals too.
