Scottish Government scraps ‘overprovision’ powers in holiday lets licensing scheme

The Scottish Government has U-turned on its plan to create new powers for local authorities to prevent short-term lets being established in an area where there are already a significant number of such properties.

The proposals were part of regulations being brought forward by government to introduce a licensing scheme for all short-term lets in Scotland.

Local government secretary Shona Robison confirmed the plan for “overprovision powers” was being abandoned as councils would already have the power to refuse licenses on the grounds of overprovision via planning controls.

In a letter to MSPs on the local government committee, she said introducing new powers may increase complexity and using existing powers would achieve “largely the same effect”.

The new regulations, to be brought before the committee next month, will require all short-term lets to be licensed by 1 April 2024, with existing operators needing to apply for a license before April 2023.

The government and local authorities will review short-term let activity over summer 2023 to gauge whether further measures will be needed to prevent high concentration.

The regulations will require properties to meet minimum health and safety requirements before a license is awarded.

It will also empower councils to add additional requirements, depending on the needs of the local area.

MSPs on the committee narrowly backed previous proposals in February, but ministers opted to withdraw the plans just weeks later following concerns from industry groups.

Robison said: “Regulation of short-term lets is vital to balance the needs and concerns communities have raised with wider economic and tourism interests.

“Following our recent consultation and engagement with stakeholders, we are making some pragmatic and significant changes to improve the proposed legislation.

“We are therefore addressing issues raised by stakeholders whilst still allowing licensing authorities to ensure short-term lets are safe and address issues faced by neighbours.”

Other changes since the original proposals include reducing public liability insurance requirements for properties, simplifying notification requirements and enabling temporary exemptions to allow hosts to try out home sharing for the first time.

In August, representatives of self-catering businesses and B&Bs withdrew from the government’s working group on the regulation of short-term lets, claiming ministers was failing to address the concerns of the industry.

But the Association of Scotland’s Self-Caterers has cautiously welcomed the changes.

Chief executive Fiona Campbell said: “We endorse the decision to remove overprovision from the licensing regime, which was a duplication with planning policy. This recognises that the government’s objective with the regulations was about ensuring health and safety across all short-term lets, not addressing housing issues.”

“However, the devil is in the detail and conversations remain ongoing. A number of important industry concerns remain, most notably the disproportionate financial impact of licensing fees on small and micro tourism accommodation businesses who are still in survival mode due to the crippling effects of the pandemic.”