Scotland’s short-term let industry faces uncertain future amid licensing challenges

06/11/2023
Picture of Fiona Campbell

Scotland’s short-term let (STL) industry is encountering a wave of uncertainty as the approval process for licensing applications remains sluggish, causing concerns for thousands of small and micro businesses across the country. According to data revealed by the Association of Scotland’s Self-Caterers (ASSC), less than 15% of the estimated 32,000 short-term lets in Scotland have received licensing approvals, leaving many operators in a state of limbo.

The ASSC conducted Freedom of Information requests with local authorities, revealing that just under 5,000 licences have been granted so far. This slow progress has raised fears among businesses about their ability to continue operations, potentially leading to closures and economic challenges for communities heavily reliant on tourism.

The STL licensing process, initiated to regulate the industry and ensure compliance with health and safety standards, has become a cause for concern. While the Minister for Housing, Paul McLennan MSP, claims that no licensing applications have been refused, reports indicate otherwise. Stirling Council, for instance, has already rejected 34 applications, highlighting potential discrepancies in the approval process.

One of the major worries is the financial burden faced by businesses, as local authorities have collected approximately £10 million through non-refundable licensing fees. Additionally, some councils have incorporated enforcement fees, raising questions about the fairness of the fee structure and its alignment with the Provision of Services Regulations.

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, expressed her concerns about the situation, stating, “With just a fraction of applications granted so far, this is a concerning yet predictable start to the new licensing regime.” Campbell emphasised the anxiety faced by small businesses and their struggle to continue their operations amid the regulatory challenges.

The licensing issues also have broader implications for Scotland’s tourism industry. The potential loss of short-term let accommodations could impact the country’s position as a leading tourist destination, further aggravating the economic challenges faced by local communities. Moreover, concerns have been raised about the possibility of an increase in second homes, potentially exacerbating housing challenges without delivering significant economic benefits.

The Scottish Government has pledged to conduct an ‘implementation review update’ on licensing in the coming year. As the industry grapples with these challenges, stakeholders and businesses are eagerly awaiting clarity and action to safeguard the future of Scotland’s self-catering industry.

Fiona Campbell concluded, “The Scottish Government need to make good on their promise for a full review in the New Year so we can determine just how much damage has been inflicted upon Scotland’s £1bn self-catering industry. The Titanic has now hit the iceberg. We now need to save as many as we can from this vital sector.”

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