CONTROL OF SHORT TERM LETS IN EDINBURGH – WHAT YOU NEED TO KNOW

Edinburgh will become Scotland’s first designated Short Term Let (‘STL’) Control Area.

The City of Edinburgh Council (‘CEC’) first consulted on the proposed designation of the entire city as a Control Area in 2021, which will now come into effect from today following the approval of the Control Area by the Scottish Government.

Thousands of businesses leasing accommodation through Airbnb and other STL booking sites will now require planning permission to operate if they are within the Control Area.

Housing Secretary, Shona Robison, has said that:

“Edinburgh was the first local authority in Scotland to propose a Short-Term Let Control Area and Scottish Government approval represents a major step forward. We have committed to give local authorities the powers to address concerns about the impact of commercial short-term letting in their communities, should they want to do that. This is an example of that local choice in action – supported by the majority of respondents to the Council’s consultation on the proposed designation”.

When will planning permission be required? 

The use of a residential property as a STL for more than 28 days per year is now considered to be development as per the Planning (Scotland) Act 2019 (‘the 2019 Act’). If a property operates as a STL for more than 28 days it is now considered that there has been a material change in the use of the property from residential and planning permission will be required to regularise the change.

The 2019 Act and associated Regulations have also introduced the concept of STL Control Areas, which enable Local Authorities (‘LA’) to designate all, or part, of a Local Authority area as a Control Area.

In STL Control Areas planning permission will always be required to use a property as a STL, even if the property is used as a STL for less than 28 days.

When will the Short Term Let Control Area come into effect?

Following the approval of the Control Area by the Scottish Government, the designation comes into effect from today (1 August 2022).

What will the key planning considerations be?

The designation of Edinburgh as a STL Control Area doesn’t mean a blanket ban on STL. Each application for planning permission will be assessed by the CEC on its own merits. As part of the planning application process neighbours of STL will be notified and there will be an opportunity for members of the public to comment on proposals.

Current planning policy related to STL is set out in Policy Hou 7 – Inappropriate Uses in Residential Areas in the Edinburgh Local Development Plan. Policy Hou 7 prohibits changes of use that would have a materially detrimental effect on the living conditions of nearby residents. Planning applications for STL will be determined against Policy Hou 7, as well as in relation to other material considerations, including the non-statutory Guidance for Businesses that was most recently updated by the CEC in November 2021. The Guidance for Businesses states that planning permission will not normally be granted for STL in flatted properties, where the potential to adversely impact residential amenity is considered to be greatest, and that STL will generally only be considered acceptable where there is direct, private access to a property from the street.

If you are currently operating a STL in Edinburgh without the benefit of planning permission, you must now pursue an application for the change of use of your property. An application with a robust supporting statement outlining the proposed use and how it will be managed to protect neighbouring amenity should be submitted to enable support from the CEC.

Do I also need a license? 

In addition to requirements for planning permission, all STL properties in Scotland are now required to have a licence to operate and LA in Scotland must establish STL licensing schemes by 1 October 2022. After 1 October 2022 new hosts and operators must have a license, with all existing hosts and operators required to have a license by 1 April 2023.

A LA can refuse to issue a license if they consider that planning permission is required for the use of a property as a STL and an operator does not have this.

All STL properties need to be licenced by 1 July 2024, otherwise the operation of a property as a STL without a license will be considered unlawful and can be punishable by a fine of up to £5,000.

How will these changes impact Short Term Lets in Edinburgh?

As a result of these changes, it is likely that the number of STL in Edinburgh will decline, which may mean less competition between operators. Where this will be a good news story for those who successfully obtain a license to operate, together with planning permission, it is likely to have an adverse impact on users and the affordability of STL, if the supply across Edinburgh is reduced.

A reduction of STL may be a positive outcome for neighbours of such uses, especially where STL have had a negative impact on residential amenity to date. Through the emerging licensing regime, the CEC will be able to use their powers to ensure that STL are more effectively managed and can further protect residential amenity.

The changes could also see properties that are refused licenses or planning permission returned to residential use, improving the supply of homes to the city’s housing market.

What is the current situation?

Since April 2022 hundreds of applications for planning permission for the change of use of properties to STL, or Certificates of Lawful Use for properties that have been in operation as a STL for 10 or more years with no enforcement history, have been submitted to the CEC to consider.

A number of these applications are beginning to be determined by the CEC and an understanding of how successful (or unsuccessful) the applications have been is still to be established. However, we continue to monitor decisions on STL to develop our knowledge to be able to advise our clients what will, and will not, be considered acceptable to the CEC in moving forward.

Ally Campbell and Rachel Mushet of our Edinburgh office would be pleased to provide further advice on the planning requirements for STL in Scotland, as required. Ally and Rachel can advise you on submitting an application for planning permission for the change of use of your property to a STL or on the submission of a Certificate of Lawful Use, together with the likelihood of success.