by Eleanor Picken, Trainee Solicitor 

Since May 2019 there have been over 32,000 short-term lets recorded in Scotland, with more than 2,700 listings in Edinburgh. The Old Town alone has 812 active Airbnb listings per square kilometre, and holiday lets on Skye now account for almost 20% of all homes on the island. Airbnb estimates that its platform boosts the Scottish economy by almost £2 million a day.

The statistics are staggering and highlight a need for reform in an area that has remained relatively unregulated despite its growing influence. There is currently no statutory definition of a short-term let in Scotland. They can be distinguished from private residential tenancies, which require that a tenant occupies the property as their principal home. In comparison, short-term lets do not become the main residence of the guest. Crucially, tenants have rights whereas guests do not.

 

2019 consultation

The Scottish Government’s consultation on the subject last year highlighted key concerns on the impact of short-term rentals on local communities. Participants cited an increase in antisocial behaviour, safety fears and the impact on an already saturated housing market as problem areas.

 

Proposed regulation

Following on from its findings, the Scottish Government has announced that local authorities are to be given new powers to implement licensing schemes for short-term lets where they decide it is in the best interests of local communities. The scheme will come into force in spring 2021 and will empower councils to designate control areas requiring planning permission for change of use of whole properties for short-term lets. Home sharing, ie renting a room in your own home or allowing others to stay in your home while on holiday, will not be affected by control areas.

The scheme will also include a mandatory safety requirement to ensure that visitors benefit from high safety standards across the board. Local authorities will also have discretion to impose further conditions to help address concerns of the local community.

Perhaps the biggest change will be the introduction of a tax regime akin to the proposed ‘tourist tax’, which the Scottish Government hopes will ensure that short-term rentals make an appropriate contribution to local communities and support local services. The exact rate and cost of the licensing fee are yet to be determined.

Crucially, the Scottish Government will have to find a balance between protecting the interests of local communities with the wider economic and tourist interests of short-term lets.

 

Further help 

For more information on short-term lets, or leases in general, please contact us on 0131 228 8111 or through the website.