Joanna Millar

The new legislation introduces planning control areas in Scotland. Through these, councils can impose planning control areas. City of Edinburgh Council has received Scottish Government approval to proceed with such a control area.

The introduction of a planning control area in the City of Edinburgh means all properties operating as short-term lets need either planning permission or a certificate of lawfulness (if they have been operating for more than 10 years). But read on for the small print. It gets complicated.

Not all operators will be able to secure planning consents. The council believes this will increase properties available for people to rent long-term or to buy as their main home, addressing the lack of affordable housing.

Many operators disagree. Even if they do not secure such consent, many say they will not sell nor convert properties to long-term tenant lets, but they will become second homes empty for much of the year.

Under current planning policies, operators seem likely to secure planning permission if they have their own main door. That will change in the next Local Development Plan which introduces refusal of all applications (including main doors). This could result in a loss of short-term let properties.

A second piece of Scottish Government legislation introduced a new licensing scheme whereby anyone wanting to operate a short-term let must have a licence. Those operating by 1 October this year can continue to do so, but they must apply for a licence before 1 April 2023. One of the pre-conditions to getting a licence is demonstrating that either planning permission or a certificate of lawfulness is already in place or has been applied for.

Councils are expected to accept applications for licences from 1 October. The timescale is incredibly tight and the six-month window for applications — from October 2022 to end of March 2023 — is causing concern.

Each council must have a short-term let licensing policy. Edinburgh Council recently issued an updated proposal restricting operators of any tenemental property in Edinburgh from being granted a short-term let licence. Even if operators have used the property in this way for decades, and have a certificate of lawfulness in place, the property will not be granted a short-term let licence.

If adopted in its proposed form, this could mean tenemental properties within the entire City of Edinburgh council area will not be able to secure a short-term let licence. This will materially impact legitimate businesses that benefit the local economy to a tune of £70m per annum.

Similar changes are happening in other local authority areas.

Whether you agree with the Scottish Government’s objectives or sympathise with the plight of short-term let operators, this new legislation is creating complexity and confusion, and has the potential to reduce the number of short-term lets across the Edinburgh to concerning low levels. Great care is required to navigate the new regulations within a short period of time.

• Joanna Millar is a legal director at Gilson Gray. This article first appeared in The Scotsman.