Short Term Lets: Consultation on Licensing Proposals

Posted on: January 27, 2021

Cockburn response to Scottish Government consultation on the licensing of Short Term Lets

The following are the Cockburn Association’s comments on the Scottish Government’s Short Term Lets: Consultation on a licensing scheme and planning control areas in Scotland.  The wider policy debate on whether there should be a licensing regime for Short Term Lets (STLs) was held in July 2019.  The Cockburn Association welcomed this consultation and called for urgent action to address the problems associated with Short Term Lets (STL) in Edinburgh.

Cockburn Response

The untrammelled use of whole properties for short-term holiday and other accommodation is a serious issue in Edinburgh and some other parts of Scotland.  Many cities across the world have experienced disruption to housing markets and community amenity by the expansion of STL provision.

The Cockburn Association convened a mini-conference in March 2018 titled, The AirBnB phenomenon – Impact and Opportunities of the Collaborative Economy and Disruptive Technologies: how should Edinburgh respond to short-term letting?.  The Association believed that effective regulation was an imperative and required as a matter of urgency.  Its summary position was:

  • Short-term lets must be regulated. Without regulation, there is a risk that the character and demography of areas of Edinburgh will be changed to the detriment of the qualities that make the city special, and without the approval of residents.
  • Regulation needs to be put in place urgently. Though more information is needed, it seems beyond doubt that not only is change taking place, but the rate of change is rapid and the scale is significant. Market equilibrium is not instant or constant. The time to act is now.
  • A system of licensing offers the most pragmatic way forward. The recent and relatively recent licensing and regulation regimes for landlords and for Houses in Multiple Occupation provide a point of reference.
  • Proof of insurance permitting short-term letting should be part of the licensing regime, except for detached properties. In addition, other safety certifications should be required, consistent with a standard Short Assured Tenancy. These measures would provide reasonable protection for all parties.
  • In tenement properties, consent from a majority of owners (excluding the proposer) should be required before a licence is granted. Tenements are special habitats: their care, maintenance and occupancy are vital to the environmental, social and economic sustainability of Scottish cities, and, in turn, this requires mutual tolerance amongst those in the tenement.
  • The Use Classes Order should be amended to remove ambiguity, while providing a proportionate response. Short-term letting of an entire residential unit should be deemed a commercial use, requiring planning permission.
  • Monitoring is needed. In particular, the impacts of the measures proposed here need to be assessed, and the findings should influence a review within a two-year period.

2020 Consultation Comments

Chapter 4: Definition

Overall, the Cockburn Association supports the definition of STLs as outlined in the consultation document.  We agree with the position with all STL requiring a license as it simplifies the regulation and avoids unforeseen loopholes that might be exploited.  We also support the use of the Repairing Standard as the basis for the licensing regime.

Issue 1: We see an issue per para 4.10 which proposes the exclusion of unconventional dwellings.  Firstly, we can see no logic in this, as several STL platforms specifically market “unique” properties such as tree houses, yurts, canal boats, etc.  Our view is that if they are to be let for short-term periods, they should be subject to regulation.  We accept that caravans and caravan parks are controlled under the Caravan Sites and Control of Development Act 1960, etc so can be managed through those processes.

In addition, this exclusion creates a loophole which may see the possible erection of structures under Permitted Development Rights such as pods, garden huts and small studios within the gardens of houses with the sole purpose of providing STL accommodation.  This would undermine the universality of the definition and its application as well as cause serious areas for confusion and strife.

Similarly, student accommodation should be specifically mentioned as in many cases it is let on a short-term basis outside term time.

Issue 2: Another issue relates to existing STL properties, a serious omission in this paper.  Many places are dealing with the impact of holiday lettings now, and evidence suggests that the vast majority of these are “unlawful” in that they do not have a Change of Use consent or may have other deficiencies which have led to these proposals.  We suggest that the Scottish Government states clearly and emphatically that at the point when licensing comes into force, no property currently used as a STL is deemed to be permissible.  That is to say, their current use has no material bearing on whether they can continue so.   The Cockburn accepts, however, that some properties have been in use as STL for many years.  In terms of planning law, a period of 7 years of uninterrupted use is usually considered to be evidence of a material use of land.  We therefore propose that the burden of proof falls firmly on their owner to prove usage over such a period – a Grandfather clause, in effect.  This evidence would need to be brought to the planning authority as part of any Change of Use application.  In a Control Area, this would need to be in every circumstance.

Issue 3: A third issue, which in the context of Scotland’s cities is crucial, is the need for a very clear regulations and guidance on tenements.  This is important in each area of this consultation document.  The Cockburn’s view is that there should be a presumption against commercial short-terms lets in tenement properties, noting that City of Glasgow Council have just such a policy in place.  Also, we could advocate that the default position for all tenements is the need to apply for planning permission even if the property is not in a Control Area.  This is to protect the special community nature of common stairs, and to prevent the erosion of amenity.  Whilst we appreciate that notification with neighbours is covered elsewhere, it is essential that the communal nature of this form of tenure is recognised in the licensing definition.  For example, all parts of the common stair, roof structure and masonry fabric are jointly owned.  Before a license is given, it is therefore essential that all owners consent to that use, and have a say in any conditions.

Issue 4: An initial date should be set for licence applications to be finalised, after which any unregistered properties will be declared unlawful, whether with a previous history of use or not — ‘established use’ should not be a factor.

Chapter 5: Control Area Regulations

We agree with the clear proposal that all STL within a Control Area will be deemed a material change of use.  However, the Cockburn still believes that greater clarity is required on a change of use, and we point to the volume of enforcement appeal cases that suggests that all STL properties involve a material change.  We believe that the Town & Country Planning Development Orders need to be amended to give full clarity to this position.

Issue 1: We have an issue with the proposals in para 5.13.  Whilst we support a policy-based approach to managing Control Areas, the example given of a de facto granting of planning consent for STL subject to temporal restrictions illustrates how easily the purpose of a Control Area could be undermined.  Firstly, a blanket issue of consents would set a precedent for future applications.  In the context of Edinburgh where a large-scale event could be defined as the summer Festival Season which lasts for 3+ months or longer, means that the impacts of over-provision on housing stock, community cohesion, etc would not be addressed.  In effect, the purpose of the control is undermined that a universal decision to grant consent.   We believe strongly that this proposal should be deleted.

Issue 2: The designation of Control Areas should cover as wide an area as possible in order to prevent serious disruption on the edge of the area.  It is generally accepted that wherever a policy boundary is drawn, the hinterland of that area will be subjected to increased pressures as a result.  Just as there is logic in licensing all STL, there is an equal logic that the whole of the municipal area should be subjected to a designation if made.  Thus, the City of Edinburgh Council could be a SHL Control Area by way of example.  We appreciate the challenges that this might raise in large rural areas such as the Highlands or the Scottish Borders.  Here, former parish or county boundaries would permit a more targeted approach (e.g. Badenoch or Skye & Lochalsh; or Berwickshire or Roxburgh).

Issue 3: Whilst we note the proposal to follow the approach for the designation of a Conservation Area for a Control Area (which we would agree with), it is essential that the Control Area aligns directly with planning policies.  As such, we would suggest that the Local Development Plan may provide a more effective means of designation as it could then link directly with the necessary regulatory policies required to govern it. In this way, it avoids a potential gap between designation and regulation.  It also ensures a wider consultation on policies and links STL management to other important management issues such as housing land supply, heritage management and amenity.

Issue 4: Also, and as stated above, we advocate that the default position for all tenements is the need to apply for planning permission even if the property is not in a Control Area.  This is to protect the special community nature of common stairs, and to prevent the erosion of amenity.

Chapter 6: Licensing Orders

Overall, the Cockburn agrees with the proposals as set out.  In particular, we welcome the recognition of noise and other impacts on neighbours and neighbouring communities.  A Maximum Occupancy condition is particularly supportable in tenement properties, where the intensification of use can cause serious amenity and safety issues.

Issue 1: The use of discretionary powers to add licensing conditions will help address the fact that not all areas in Scotland (or indeed within a local authority area) have the same issues that need to be managed. However, these should be contained in national guidance to ensure consistency and transparency. 

Issue 2: A potential management issue arises where the property is sub-let from another owner.  Evidence must be provided that they have the owner’s permission, and that the owner understands that he could be jointly liable for any issues arising from the let. Where the property is sub-let from another owner, evidence must be provided that they have the owner’s permission, and that the owner understands that he could be jointly liable for any issues arising from the let.

Issue3: An issue that needs to be addressed emerges from para 6.69 which proposes a need to notify neighbours within a 20m distance including all residents on a tenement stair and neighbouring tenement stairs.  Whist we welcome and support this, there is no indication as to the purpose of this notification and what happens following this.  The Cockburn believes that neighbours must be given the right to influence the licensing process and be consulted, not merely notified of a license application.  This requires a process to be established to allow any contested applications to be heard.

Issue 4: A further issue arises in the assessment of applicants being “Fit and Proper”.  We have no doubt that the vast majority of STL owners and their agents are working to the best possible motives from their perspective.  However, many Licensees will be remote from their properties, and will be disassociated from the immediate impact of problem that arises.  Therefore, we believe that an additional criteria for assessment should be any complaints from neighbours and/or local constituents (including civic groups or community councils) should be taken into account for new or renewal applications.

In relation to the above and In view of the increase in fraudulent lettings, the Licence Number of the property should be placed on all advertisements (as is increasingly the case with full-time lets) to allow prospective renters to check the credentials of the property and its owner. The Register should be more accessible and provide more information than the currently cumbersome system which has no simple way of identifying other properties owned by the same landlord.  Continuing to operate premises without obtaining a licence for a property should be a criminal offence. If property monitoring finds that a premises is being used without a licence, then it should be immediately closed down and all rental income accrued should be seized under the Proceeds of Crime legislation.

Issue 5: Relating to the above is the commercial nature of some STL businesses, who own/manage large numbers of properties, locally and/or nationally.  Therefore, enforcement needs to target the licensee rather than the property.  Some platforms are known to camouflage multiple owners with fictitious or substitute hosts.  As recognised in para 6.119 (noting that a beach might lead to significantly more revenue), there can be motives to circumvent poor behaviour to the cost of locals and neighbours.  Consideration might therefore be given whereby a breach of condition by a licensee is applied to all their properties, or at least all their properties within a local authority area or Control Zone.

Issue 6: One of the most significant issues is enforcement.  Whilst we welcome the controls and sanctions proposed (paras 6.109 and 6.110), experience of the Enforcement Notice procedure suggests that it can take significant time and resources to implement.  Given the increased pressures of local authority budgets, concern is that a very liberal approach to enforcement might be taken, and too great a reliance on “non-compliance” or “improvement” notices to kick the ball into the long grass.  Clear and unambiguous guidance and performance standards for enforcement are therefore required.

Issue 7: Another issue is timescale.  There are a variety of timescales for licenses throughout the document.  Para 5.9 talks about planning consents for default period of 10 years (which is much too long).  A local development plan, which may contain very important policies for the regulation of STL and Control Areas, is a 5-year document.  Para 6.125 notes that the 1982 Act allows for a maximum of 3 year licenses. For all parties, it is important to have clarity.  At the very least, any planning consent for a change of use should be no longer than the license period available.

Issue 8: To prevent dangerous overcrowding the maximum occupancy should be determined in the same way as currently for HMOs (i.e. a maximum of 2 persons per bedroom, or single if under 2.25m wide), adequate kitchen and living space, full bathroom / wc facilities, and with noise insulation on floors to protect neighbouring residents. The allowed occupancy should be noted in the licence particulars.