In a letter to the convener of the local government and communities committee, James Dornan, housing minister Kevin Stewart stated his intention to withdraw the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2021 to allow the government to “address concerns raised by Members who are not content to pass this Order presently”.

A stakeholder working group met for the first time yesterday to help develop the draft guidance which Mr Stewart said will help to provide reassurance on the operation of the scheme to operators and hosts in the sector.

Subject to the outcome of the election, the Scottish government intends to re-lay the legislation before Parliament in June, accompanied by the draft guidance, to ensure that the timetable on introducing licensing remains the same.

The government also reiterated its intention to continue with legislation allowing councils to establish short-term let control areas. This legislation, it said, will empower local authorities to implement short-term let control areas, if they wish to do so, to address pressures created by whole property short-term lets, ensuring that homes are used to best effect in their areas.

Mr Stewart said: “Our proposals to licence short-term lets were developed in response to concerns raised by residents in communities across Scotland and Members in all parties. 

“However, I know concerns have been raised, so have therefore decided to withdraw this legislation so that it can be reconsidered in parallel with draft guidance which will help address those concerns. I want the licensing scheme to be as efficient and effective as possible in ensuring the safety of guests and residents, and to provide local authorities with the powers to balance community concerns with wider economic and tourism interests.

“I want to emphasise that our proposals and overall timetable remain the same. Safety of those using short-term lets is vital and our proposals ensure that all short-term lets across Scotland adhere to a common set of safety standards as well as allowing local authorities to tackle issues such as antisocial behaviour.

“This government’s intention, therefore, subject to the outcome of the election, is to re-lay this legislation in June alongside the published draft guidance. If it is passed, local authorities will still have until 1 April 2022 to establish a scheme tailored to their local needs and existing hosts will have until 1 April 2023 to apply.”

Scottish Labour described the decision as a “screeching U-turn” which leaves the tourism sector, local authorities and communities in the dark.

Local government spokesperson Sarah Boyack said: “This screeching U-turn is the result of the SNP’s failure to listen to the genuine concerns of the tourism sector and Scotland’s hard-pressed local authorities.

“Scottish Labour supports the regulation of short-term lets, but the SNP’s proposal, as it stood, risked unjustly penalising our tourism sector and foisting greater responsibilities onto our hard-pressed councils without providing any new support.

“We are in the midst of a housing crisis in Scotland, with 32,000 homes lost to short-term lets from 2016-2019 and communities left hollowed out by lack of action. Nonetheless, the SNP’s plans were not fit for purpose. We need an effective licensing scheme that has been developed in partnership with the tourism sector and our councils, that can successfully tackle the damage done by years of de-regulation.

“It’s time for Kevin Stewart to go back to the drawing board and put together a proper plan to regulate short-term lets that does not penalise our tourism sector or put more pressure on our over-burdened councils.”