A holiday letting agency has criticised the introduction of licensing for short term rentals in Scotland as “poorly thought-through and ill-timed”.
Iain McDonald, onboarding manager at Finest Retreats, said he has been inundated with calls over the past fortnight from current and future owners.
“Scotland is one of our key areas for growth, yet many owners there are either unaware of the new licensing requirement, or aware but confused by the complex application process and specific constraints applicable to each locality.”
“With limited awareness of the new requirement, four different types of licences and differences in implementation depending on which local authority the property falls under, it seems as though this new requirement has been designed to be as unwieldy as possible,” McDonald commented.
Property owners in Edinburgh are subject to an additional hurdle, as properties in the council's new Planning Control Area also have to submit a planning application in order to let the property on a short term basis, as well as apply for a lettings licence.
The scheme is in addition to the city's short-term let control area, which will be introduced on 1 October.
Around a third of Scotland's short-term lets are located in the capital, with the measures introduced in response to concerns that such lettings have exacerbated housing shortages and fuelled anti-social behaviour.
Other areas of Scotland may follow this lead, with Badenoch and Strathspey having already applied for PCA status. Planning applications can take up to three months.
These new rules apply to all types of short term lettings, from stationary boats to castles, tipis to yurts, shared homes or self contained accommodation.
Finest Retreats owner Richard Bond is concerned that the new licensing requirement will prove off-putting to new entrants to the market, given that from 1 October they will not be permitted to take bookings or deposits until they are fully licenced.
“The additional costs involved with licence fees as well as income lost while awaiting the outcome of a licence application are all going to impact owners first, but also likely be passed on to guests.
“At a time when household budgets are being squeezed by essential bills, it’s yet another blow to consumer spending confidence and could prove crippling to business-owners and local economies alike.“
A survey undertaken by OnePoll on behalf of the agency in May 2022 indicated that a significant number of current owners might turn their full time holiday lets into second homes in order to avoid the financial and additional administrative burden of licensing.
“72% of holiday let owners surveyed told us that they are likely to withdraw from the market if taxes and restrictions aimed at second home owners also apply to them” said Bond. “The potential detriment to local economies must not be overlooked.”
He also expressed reservations about the inclusion of a requirement to seek approval from the licensing authority for a change in management company.
“Property owners should be free to choose whichever management company they feel will best serve their interests - adding in unnecessary obstacles of this kind will actually have the unintended consequence of reducing competition and lowering standards.”
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