Short Term Lets in Scotland

25 October 2023

From the 1st October, 2023, the Scottish Government has introduced the licensing of existing short term lets in Scotland, and all new short term lets must have a licence in place before taking bookings. As many farmers diversify and let out properties, it’s important to be aware of the new legislation.

The legislation regulates holiday accommodation in Scotland. The government’s approach is two-fold. Firstly, the legislation aims to protect visitors, ensuring that the properties they stay in meet the standards set out in the legislation, and that guests are not hosted in unsafe or unfit holiday accommodation.

Secondly, the legislation seeks to prevent properties having multiple uses and to ensure that there is transparency and traceability regarding who owns and/or manages a property. Situations in Edinburgh illustrate why this has become necessary in some cases – for instance, a flat might be let out as holiday accommodation over the summer while being let as student accommodation during the university term. At present, Edinburgh is the only council which requires planning permission for a short term let, although this is an issue you should check carefully with your own local authority as some other areas have considered planning requirements. The regulations also ensure that there is a process in place for residents in neighbouring properties to be able to report legitimate concerns or disruption due to a property’s use as a short term let.

The Scottish Government has set out mandatory legislative requirements for a licence, which can be applied for through your local authority (based on the location of the property). However, you should be aware that local authorities are required to implement the legislation in their area. Therefore, each Council has had to introduce their own application process and in some cases they have included additional local requirements they feel are relevant to the local area. This means that though the requirements and application process are broadly similar across the country, there is some degree of variation in the paperwork required for applications and the costs of a licence in different parts of the country.

Applying for a short-term let licence

The Scottish Government has issued Guidance for Hosts and Operators which can be found on their website here . This includes a detailed definition of what is and what is not a licensable short-term let. There is also further information on all the mandatory conditions, which are the same across the whole country. In addition, there is information on what type of licence to apply for (there are four slightly different types, depending on whether you rent out a whole property, or if you rent out rooms in your own home).

Most businesses will already have nearly all the paperwork necessary, it’s just a case of pulling the information together and carrying out any work that is required. SAC Consultant Jennifer Galloway, has extensive experience supporting clients through the application process and she has put together a basic list of what is required and why:

Energy Performance Certificate (EPC) – This establishes the energy performance of your property and is a move towards green tourism. You can search the Energy Saving Trust’s website to find out if there is a pre-existing EPC for your property.
Electrical Installation Condition Report (EICR) – This checks your property’s electrics are safe and legal and should also confirm you have the minimum number of alarms for smoke, heat and carbon monoxide detection.
Portable Appliance Testing (PAT) – This is required for all electrical appliances provided in your property to ensure safety and good maintenance.
Water supply – All properties require a Legionella Risk Assessment for the internal plumbing. If the property is supplied by a private water source a risk assessment by the local authority is also required to ensure water supply is safe.
Fire Safety – All properties must comply with Scottish Fire and Rescue Short Term Lets guidance and provide a Fire Risk Assessment. Appropriate firefighting equipment must be provided and properly maintained. There must also be emergency procedures in place for a fire or electrical outage.
Gas Safety – If there is gas in your property a Gas Safety Certificate is required.
Insurances – You must hold valid Buildings and Public Liabilities Insurance cover for your property.
Floorplans – Must be submitted, however the level of detail required varies, depending on the local authority’s requirements.

You will also be asked for full contact details and information, including any criminal convictions, relative to the property owners and managing agent (if the owner does not manage the property directly). You will also need to provide occupancy details for the property and existing businesses may be asked for historic occupancy rates for up to three years prior to the application date. Please note this list is not exhaustive and your local authority may require additional documents. Payment is required when you make the application and the amount you will pay also varies regionally. You should check your local authority’s website for up-to-date application fees and a local checklist of requirements.

If they have not already started doing so, agencies and booking platforms advertising short term lets will start requesting the licence number for your property. If you don’t have a licence (either pending or approved), they will not advertise or take bookings for your property until there is one in place.

Any business found to be operating without a licence, is committing a criminal offence. You could be liable for a fine of up to £2,500 and be banned from trading for up to one year. If you applied for a licence for an existing business prior to the 1st of October deadline then you can continue trading unless told otherwise by your local authority, even if the licence is still pending approval.

More Information

If you have any questions about whether you need to apply, or what documents you need, please get in touch with Jennifer at the Stranraer SAC Consulting Office - 01776 70 2649 or jennifer.galloway@sac.co.uk.

If you are considering opening a short term let business, watch our FAS TV video about the McKinnels’ experience of setting up a holiday let in southwest Scotland. They outline the groundwork they did to set it up and the practicalities of running a holiday let alongside their existing farming business.