On 13th August 2024, ASSC CEO Fiona Campbell and Director Iain Muirhead met with the Minister for Housing and the Minister for Public Finance, whose portfolio also covers Planning. Overall it was a constructive meeting but there is still work to be done getting across the details and lived experience of our members.
This was followed up by a letter to Ministers on 16th August:
“Dear Ministers,
Many thanks for your time on Tuesday, and the opportunity to discuss the impact current planning practices are having on the successful implementation of the Short-Term Let Licensing scheme.
As we discussed, in relation to planning issues for STLs, the issues that are being brought to our attention by our members can be broadly categorised into 2 issues.
• There is an inherent uncertainty in the short-term let legislation that has resulted in a confused approach to the requirement to apply for a certificate of lawfulness of planning permission when applying for a licence across Scotland.
These issues are covered in the letter from Burness Paull LLP, which we sent to you via email on 27 June 2024 (titled ‘Short-Term Let Planning’). For your convenience, I have attached this opinion again. We have subsequently requested this opinion to be reviewed by James Findlay KC who strongly agrees with this opinion (we will forward his finalised opinion shortly). This letter highlights the opinion that currently practices adopted by local authorities, including the suspension of licence applications, are likely unlawful. We respectfully ask that you please respond to this letter at your earliest convenience as there are significant time-sensitive issues occurring in both Edinburgh and Highland Council authorities.
• Due to the ‘fact and degree’ assessment of whether or not planning permission is required for any short term let outside of a control area (or retrospectively within a control area for existing operators), there will always be an inherent uncertainty for anyone who holds a short- term let licence in Scotland.
• This is now increasingly evident from recent DPEA decisions that appear to have changed significantly from earlier similar assessments. I present below extracts from recent decisions that show that there is almost no situation where a short-term let would NOT be considered a material change of use.
To summarise what we have learned from recent DPEA and council decisions:
• If the STL use is year-round, “there is no evidence to suggest that the use is limited to only part of the year…..” Deemed a Material Change of Use (MCU)
• If the use is PART of the year “looking (only) at the times when the use is taking place, this is intensive and subject to spikes……” MCU
• If secondary or home letting, ‘the operator is away from the property and cannot mitigate guest behaviour…..” MCU
• If home sharing, “the host might be in another part of the property or temporarily away and can’t mitigate guest behaviour……” MCU
• If the area is quiet “guest movements would be extremely noticeable given the quiet residential nature of the area….” MCU
• If the area is busy and vibrant, surrounded by nightlife etc. “guests are more likely to go out at night to make use of the attractions nearby….” MCU
• If a communal entrance where lots of doors passed/lots of neighbours… “guests pass multiple doors to get to the appeal property….” MCU
• If a communal entrance but only one other door nearby and NOT passed when accessing the appeal property… “this is an ‘intimate’ setting where the presence of guests would be super- noticeable and distressing…” MCU
• If a private entrance “guest movements would be noticeable to adjacent properties either side…..” MCU
• “I base my decision on the facts before me” / “The FACT that there have been no complaints is irrelevant to my decision this use COULD cause a disturbance… ” MCU
• The appellant has not proved a negative to me by supplying evidence that they ONLY use one bedroom in their house, or ONLY STL for part of the year….. MCU.
Of great concern to our members, is the level of evidence that has been obtained to support some of the assertions made by the DPEA on the hypothetical impacts of short-term lets. Many of our members are of the view that this shift in decisions by both the councils and DPEA, to ensure all short-term lets in Scotland will require planning permission, is driven by political motives rather than evidence or facts, as a means to reduce numbers. We are aware of several court challenges being considered in relation to the issue of ‘material change of use’ from our members.
This is a significant issue, as the recent appeal decisions from the DPEA would imply that the whole of Scotland is now a ‘de-facto’ control area. As discussed at our meeting, this means that anyone granted and holding a licence will have no certainty over the lawfulness of their operation without a planning decision or a certificate of lawfulness. In this circumstance, it will be almost impossible for
anyone seeking finance from a lender to provide finance to a ‘holiday let’ without a planning decision or a certificate of lawfulness, even outside of a control area. We are aware of members who have been refused finance on this basis. This was not the case before the introduction of licensing. Similarly, the sale of any self-catering property will now require planning permission or a certificate of lawfulness to be in place.
The cost of obtaining planning permission or a certificate will typically be between £600 – £1800 plus planning consultant fees. Given that even ‘home letting’ and ‘home sharing’ situations have been recently judged to require planning permission, and mandatory condition 13 even requires planning permission for temporary exemptions, you can see how this cost will be prohibitive for most and will be more likely to result in ignorance of regulations in many cases. We question the requirement for this additional layer of planning regulation given we now have the licensing scheme in place, given that the majority of amenity issues considered as part of licensing are arguably better addressed now as part of licence conditions.
As discussed, as a result of this growing issue, we engaged the services of Neil Collar (Brodies LLP) to seek an initial view on potential mechanisms to remove this inherent uncertainty for our sector. Please find attached this opinion. We would welcome a more detailed discussion on this point.
Whilst we of course welcome our meeting and hope for many more, we came away from the meeting with a strong sense that the issues that are evident to many of our members are still not reflected in the measures that you appear to be assessing to ‘monitor the situation’. There still seems to be very little recognition that the issues we are raising are legitimate concerns or that there is any sense of urgency. For example, you presented statistics from officials on the number of ‘planning applications processed’, however, the operational efficiency of the planning department would not in any way reflect the challenges our members face. Likewise, a key measure of licensing being ‘monitored’ appears to be the number of licences processed and granted. This statistic does not in any way present the challenges our members are facing with the licensing process or indeed reflect any measure of success of the objectives of STL regulation.
We would welcome working with you to consider some measures that would better capture the situation ‘on the ground’. Perhaps a subsequent meeting with Housing, Planning and Tourism Ministers should also involve a wider cross-section of operators across Scotland to hear first-hand experience of these issues we have explained. We would be more than happy to facilitate this.
Whilst licensing is still in relatively early stages, there are already clear indications of the impact on tourism as illustrated by evidence provided to the Local Government, Housing and Planning Committee for their meeting on 25th June 2024. Further impact can be illustrated by more recent minutes of the STA Council. For that reason, I have copied in the acting Tourism Minister, and the CEO of the STA, Marc Crothall. Scottish Assessors Association figures already show a Scotland-wide reduction of self-catering units on non-domestic rates of 5%; while this increases to 20% in Edinburgh and 54% in Glasgow. We have also witnessed a 17% drop in the number of STLs in East Lothian. Given the backdrop of planning and licensing outlined above, we are in no doubt that these early indications are just the start of a significant decline in self-catering accommodation across Scotland. If this is not the intention of the STL regulation, as repeatedly assured, then urgent action is required to reverse this trend.
Finally, there are also signs that the inherently complex nature of the existing scheme is already resulting in a thriving ‘black market’ which I set out in my email of 15th May 2024. Examples such as this Facebook
group: https://www.facebook.com/groups/193624720686313 provides evidence of a vibrant black market of unlicensed properties. A thriving black market will fundamentally undermine the purpose of licensing and is already of serious concern to our members. It is therefore important that policies and regulations are sufficiently balanced to ensure compliance is encouraged. I fear the inherent complexities between planning and licensing will only result in considerable growing non-compliance if this is not simplified and more sensible policies encouraged across local authorities.
Overall, our sector deserves clarity, consistency and certainty and regulations that are targeted, reasonable, justified and lawful.
In terms of licensing, we seek a further amendment to clarify outstanding matters, as per our implementation update in February.
In regard to planning, we ask the Scottish Government to:
1. Amend legislation and guidance to clarify the lawful position with regard to planning and how it aligns with licensing
2. Hold a further meeting to discuss the matters raised by Brodies LLP
3. Offer a moratorium for all planning applications until the status quo is addressed.
We look forward to working with you constructively and collaboratively in the coming weeks.”