Scotland forced to scale back Nicola Sturgeon’s holiday-let crackdown

Hotel prices in Edinburgh climbed 9pc in the 16 months following the rollout of stricter short-term let rules - Guy Brown/Alamy Stock Photo

The SNP has been forced to water-down its crackdown on holiday lets after being accused of driving away tourists.

Landlords have been handed an annual six-week exemption from expensive licences that threatened to cripple Scotland’s tourism industry.

Nicola Sturgeon’s licensing scheme, which came into force in October, required owners of short-term lets, including self-catered accommodation and B&Bs, to apply for a licence of up to £520 to take in guests.

But under changes to legislation approved by members of the Scottish parliament on Wednesday, hosts will not be forced to buy a new licence when purchasing a holiday-let from another landlord.

People building new holiday lets will also be allowed to apply for a provisional licence before building work is complete and hosts will be able to apply for a maximum of three temporary exemptions a year.

The reversal followed warnings that the short-term let regime had placed Scotland’s tourism industry at risk, with overseas visitor numbers already dwindling and jobs on the line due to reduced revenue.

Scotland’s housing minister on Thursday supporting short-term lets is “vital to Scotland’s tourism sector and wider economy”.

Fiona Campbell, chief executive of the Association of Scotland Self Caterers, the industry body for self catered accommodation hosts, said: “Clearly we are delighted that there has been some movement, but they have merely tinkered around the edges”.

But she added that the new provisional licence, which is designed to help landlords obtain mortgages on newly constructed holiday lets, may not be good enough for lenders.

“It’s meant to provide comfort that you will get your licence. But in reality it means you can’t because you can’t start trading until you actually do get your licence. It’s a waste of time,” she said.

The rule changes mark a climbdown from how the licences initially operated. After the licensing requirement was implemented last year, some councils such as Edinburgh introduced further regulations such as the need to apply for planning permission.

An analysis by listings website Airbnb last month found that half a year on from the new regime, hotel prices had increased, particularly in Edinburgh where there had been a 9pc rise in a year.

The firm blamed the increase on short-term lets coming off the market due to the new policies putting more pressure on accommodation.

The new rules have also coincided with a slowdown in Scotland’s build-to-rent sector.

Airbnb also found that during large events, such as Taylor Swift’s concerts in Edinburgh, a shortage of accommodation meant prices surged by 84pc, far higher than in London and Cardiff, where the American singer has also performed.

Andy Fenner, chief executive of the UK Short Term Accommodation Association, another industry body for short-term hosts, said: “These changes represent an important first step towards creating a better framework for the hundreds of small businesses operating holiday lets across Scotland, as well as local communities.

He added: “Although significantly more work needs to be done, these changes are a step in the right direction. We now look forward to continuing the conversation with the Scottish government to ensure Scotland has a fair and proportionate short-term lets scheme that works for all Scottish businesses, communities, and visitors.”

Scotland’s short-term let licence costs around £260 for a double room and up to £520 for a short-term rental house with a maximum occupancy of 10, according official government figures.

Paul McLennan, Scotland’s housing minister, said: “Short-term let accommodation is vital to Scotland’s tourism sector and wider economy.

“The short-term lets licensing scheme aims to protect the reputation of responsible operators and ensure the sector is regulated in line with other accommodation such as hotels and caravan parks, giving guests assurance of consistent safety standards. The technical updates to the scheme passed by Parliament were introduced in response to engagement with short-term let operators and the wider tourism industry.

“This will ensure the scheme continues to deliver quality and safety assurance for guests, whilst protecting the needs of local communities.”

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