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ASSC Submission to City of Edinburgh Council Consultation, Choices for City

The ASSC has submitted a response to the City of Edinburgh Council Consultation, Choices for City

Choice 9

We want to consult on designating Edinburgh, or parts of Edinburgh, as a ‘Short Term Let Control Area’ where planning permission will always be required for the change of use of whole properties for short-term lets. Do you agree with this approach?

The Association of Scotland’s Self-Caterers (ASSC) note that the Scottish Government consultation on the regulations pertaining to short-term lets from the Planning (Scotland) Act 2019 has not yet taken place. Section 17 of the Act will enable a planning authority to designate all or part of its area as a short-term let control area but the Scottish Government’s consultation will inform what the regulations will include. Before any real substantive discussion on whether Edinburgh as a whole, or parts within the city can be designated as a short-term let control area, the Scottish Government need to provide a proper legal definition of what constitutes a short-term let.

The Private Housing Tenancies (Scotland) Act 2016 introduced a new type of tenancy called the Private Residential Tenancy (PRT), which took effect from December 2017. Any landlord accepting tenants for over 31 days needs to register as a landlord and sign a tenancy agreement with their tenant. Holiday lets are excluded from the terms of the Private Housing (Tenancies) (Scotland) Act 2016. A tenancy created for the purpose of conferring on the tenant the right to occupy the property for a holiday will not constitute a PRT. We believe therefore that any let which does not exceed 31 consecutive nights be considered a short-term let.

Following this, we believe that it is the role of the Scottish Government to define what a short-term let control area is, and how one can be designated. In line with the ASSC’s belief that short-term let control areas must be evidence-based, a nationally-recognised designation of a geographical area, such as a postcode, would be the most appropriate way of demarcating a short-term let control zone.

Once that has been established, we believe that short-term let control areas must follow the following three principles:

  • Proportionate and non-discriminatory, in line with the EU Services Directive

Under the EU Services Directive, the European Commission reserves the right to take to court any jurisdiction found to be introducing laws which are not proportionate or in the public interest. In January 2019, the Commission sued the city of Brussels for introducing rules which were deemed to be disproportionate. According to the European Commission, an authorisation scheme can only constitute an appropriate policy response in instances of high urban pressure.

This leads us to our next point: short-term let control areas must have a firm basis in evidence. The evidence base can be derived from the short-term lets licensing scheme which is also being taken forward by the Scottish Government. Local authorities like City of Edinburgh will be able to see how many short-term lets there are in certain areas. If this number exceeds a certain percentage of the total housing stock, a short-term let control area can be introduced. We do not believe it is proportionate to designate the whole of Edinburgh as a short-term let control area but the Council should be able to introduce control areas within parts of the city if there is a robust evidence-base to support this.

  • Evidence-based and reviewed on an annual basis

Given the dynamic and ever-changing nature of the housing market in Scotland, it is only right that the evidence basis for short-term let control areas should be reviewed on an annual basis. At the start of each year, local authorities like Edinburgh should review whether areas which are currently designated as short-term let control areas still meet the criteria for designation, as well as whether some areas have begun to meet those criteria, and hand out designations on that basis. Given that operators will have to submit the postcode of their property when applying for a short-term letting licence, the ASSC believe that the postal address system is the simplest way of designating areas to become short-term let control areas.

  • Only apply to whole homes let for more than 140 nights per year, in line with existing tax rules in Scotland

Given that the core aim of short-term let control areas is to protect residential housing stock, its controls should not cover homes which are genuinely being lived in for some portion of the year. As such, those letting spare rooms in their homes, and those who are intending to let for fewer than 140 nights per year, should not have to apply for planning permission to continue letting in a short-term let control areas.

Self-Catering accommodation is defined as: “Any lands and heritages which are not the sole or main residence of any person; and b) which either i) are made available by a relevant person for letting, on a commercial basis and with a view to the realisation of profit, as self-catering accommodation for short periods amounting in the aggregate to 140 days or more in the financial year; or ii) if they have not been made so available for letting in that year, are intended by a relevant person to be made so available for letting in that year and the interest of the relevant person in the lands and heritages is such as to enable him to let them for such periods.” (Scottish Assessors Association). This is the definition in terms of Non-Domestic Rates (NDR), at which point a property can no longer be considered to be part of residential housing stock.

If a property is available for let for under 140 days, it means the property is in the Council Tax system and may well be used in part by the primary resident; available for let for over 140 days places the property in NDR. This point is in line with the existing distinction between domestic and commercial use in terms of domestic council tax or commercial use / NDR.

The Private Housing Tenancies (Scotland) Act 2016 introduced a new type of tenancy called the Private Residential Tenancy (PRT), which took effect from December 2017. Holiday lets of under 31 days are excluded from the terms of the Private Housing (Tenancies) (Scotland) Act 2016.

The tax issue is quite different. To qualify as a trading business under the Furnished Holiday Let (FHL) tax rules, a property must be available for let for 210 days and actually let for 105 days.

Dwellings which fall into the two categories articulated above (NDR/FHL) would never be available on the long-term rental market, as they are excluded from PRT legislation and FHL taxation rules.

B We want to create a new policy on the loss of homes to alternative uses. This new policy will be used when planning permission is required for a change of use of residential flats and houses to short-stay commercial visitor accommodation or other uses. Do you agree with that approach? 

Edinburgh City Council state that the policy will set out criteria to help determine when a) material change of use from residential to short-stay commercial accommodation has occurred, and b) when it will be acceptable.

On point (a): the ASSC would like to highlight legal advice on the requirement for planning permission for self-catering properties which is pertinent to this question. This was supplied by the legal firm Brodies LLP in March 2018.

Some of the main points from the legal advice obtained by the ASSC include the statement that:

“…the commercial element (in self-catering use] is broadly similar to a residential property being occupied by a tenant paying rent…The question is therefore whether short stay occupation necessarily has different planning considerations/impacts. Short stay occupation involves people living in the property, just for shorter periods. However, that does not necessarily mean the nature/impacts of the occupation are different.”

The advice goes on to discuss how permanent residents can have different movements depending on a variety of issues, including employment, leisure interests, family circumstances, health. For instance, a family with teenage children might enter and leave the property many times during the day and night. Therefore, the advice maintains that:

“Users of a self-catering property are therefore unlikely to exhibit markedly different characteristics to more permanent residents. Disruptive or anti-social behaviour is just as likely in residential use as self-catering use.”

The advice concludes with the following:

“…reasonable arguments can be made that self-catering use does not involve a material change of use from residential use. That has been the outcome in individual cases decided by appeal reporters/inspectors and upheld by the courts. It is also impliedly supported by the statements in the Scottish Government Circular 4/1998.”

This was sent to the City of Edinburgh Planning Authority back in April 2018.

In relation to point (b), there is a statutory requirement for planning permission to be obtained for “development” (Town and Country Planning (Scotland) Act 1997, section 28.

  • 2.2 There are 2 aspects to “development”: physical changes (eg. building works) and material changes of use (TCPSA section 26).
  • 2.3 There is no statutory definition of “material change of use”. Whether any change is material, and therefore requires planning permission, is a question of fact and degree for the planning authority to decide.

ASSC’s legal opinion focuses on the use aspect.

As per the answer to choice 9A, we insist on a proper definition of what constitutes a short-stay, and in addition, what constitutes a material change of use. Overall, we feel that the questions on Choice 9 are premature as they come before the Scottish Government’s own consultation on Section 17 of the Planning Act which will inform what the regulations will include. In this, it is obviously imperative that the Scottish Government provide a definition of what constitutes a short-term let. That is necessary before anyone starts to discuss whether to introduce a short-term let control zone within their locality

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