In October 2022, new legislation came into effect* in Scotland that will change how landlords operate if they want to market their properties as short lets. Simply put, any property owner who wishes to advertise and let out their accommodation to a short-let tenant needs to apply and pay, often hundreds of pounds per property, for a new licence from their local council, and in some cases they will also need to apply for a change in planning use before even submitting a licence application.
The law has created a backlash within the self-catering community as many landlords fear this new legislation is short-sighted and will have unforeseen negative consequences, with many landlords forced to remove their properties from the short let market altogether. For cities and rural areas that rely heavily on tourism, such as Edinburgh, especially during the Festival, the result of this new licencing regulation, could mean a significant reduction in available accommodation and lead to a loss in revenue from the tourism sector. On a practical note, it’s not just the tourism sector that could be affected. Short and mid-letting, through the likes of platforms such as Homelike, is also crucial for corporates, professional contractors, NHS workers, academic staff, and mature students, among others, who are required to relocate to an area for a period of time. Even families looking to relocate to a new area, or move out of home for a few months while building works take place may well find their accommodation options drastically reduced if landlords switch their properties away from short and mid lets.
Even though the law was passed in October 2022, landlords and property owners have until October 2023 to apply for a short-let licence, a deadline which has been extended at least twice. There are in fact 4 different types of licences available. They cover home sharing (when you’re living in the premises), home letting (when you’re letting out the property while you’re away), secondary letting (when you don’t permanently live in the property you are renting out) and the fourth licence is a combination of both home letting and home sharing. More information is available to landlords and property owners on the Scottish Government website (https://www.mygov.scot/short-term-let-licences) which contains a questionnaire to help ascertain if a licence is required and also what type. Owners can also be directed to the specific page on their local council website to start the application process.
Property owners, who do not wish to apply for a licence, or who may be refused a change of planning use if required, will ultimately have no choice but to either not let out at all or to market the home on a purely long let basis under a PRT (private residential tenancy agreement).
*The Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2022