Scapegoating Short-Term Rentals Won’t Solve the Housing Crisis

There’s a housing crisis in this country. Scotland, and our capital city in particular, just doesn’t have houses available to meet the needs of our population. This lack of housing represents one of the biggest challenges that we face as a country and, without doubt, something must be done about it – and soon. It is simply too important a problem to be allowed to get much worse.

However, before we can begin to resolve this situation, we must understand how it came about in the first place. If our medicine is to work, and for future generations of Scots, and it must, we have to understand how the patient became ill and what their symptoms are.

Sadly, in the context of the housing crisis, this is where our politicians and pressure groups make a huge mistake as they continually misdiagnose the problem and how it came about. Driven by a variety of different individuals, from fringe politicians to respected figures in the property business, some opinion-makers have decided that there is a direct relationship between the number of short-term rentals in Scotland, especially in Edinburgh, and the housing crisis.

Whether they are spurred on by their own self-interest, politically motivated reasoning, or the need to feel relevant, their diagnosis is the same – short-term rentals have caused the housing crisis. No ifs, no buts (and nothing to do with housing cuts).

Far from being just an innocent mistake, the promotion of this falsehood has serious implications. For the same reason that a misdiagnosis has serious ramifications for a patient, without meaningful action, things will get worse.

The truth is that the short-term rental market, while it is worth £50million to Edinburgh and £723million to Scotland as a whole, actually accounts for a tiny percentage of housing stock, according to our recently published report, Far More Than Just Houses. In fact, according to National Reports statistics, there are five times as many empty properties in Scotland than there are self-catering properties. Short-term rentals simply aren’t there in sufficient numbers to have a significant impact on housing supply.

What has led to the housing crisis is the fact that not enough houses have been built.

While the crisis is not the fault of any one government or party, there is blame that must be shouldered if we are to address the problem like a grown-up country.

The governments of the 1970s through to the 1980s oversaw a massive reduction in housing construction – a trend carried on through the 1990s and the 2000s by successive administrations. This is understandable as governments face competing pressures and committing to housebuilding is a large commitment for any government to undertake; but the facts are the facts and we’ve seen a reduction in housing stock and a steady increase in population. Compared to these factors, whatever increase in short-term rentals there may have been in Scotland or anywhere else is insignificant.

The motivation is perfectly clear, even if it is not justifiable; it is far easier to make a scapegoat out of an industry than it is to look back on the past decades of housing policy and conclude that monumental, era-defining, mistakes have been made in planning and execution. To blame short-term rentals is easy, simple, and can be morphed into a moral crusade for people to get irate and indignant about. A good, hard, honest look at housing policy is difficult.

We at the Association of Scotland’s Self-Caterers, Scotland’s only trade body representing the traditional short-term rental sector, have an interest in being represented accurately and for all the issues that effect our sector to be handled sensibly and with vision. The scapegoating in the name of finding an easy answer that we’ve encountered is as far removed from this as could be.

Rather than taking cheap-shots at the people who make their livelihoods and support their families in our historic industry, which is as important a part of our compelling and world-beating Scottish tourism offering as any other, policymakers and influencers would be better placed using their sway to get on with the job of building more houses for those who need them. Committing to this would be a bold and difficult decision to make but, as the old adage says, nothing worth having ever came easy.

The number of Scots who are facing housing insecurity is too high. Now is the time for action on housing stock and to stop blaming a sector whose impact on that supply is negligible. Scots deserve better and any politician who took the initiative and worked to help them would have the support of the ASSC and all of our members across Scotland.

Fiona Campbell
Chief Executive, Association of Scotland’s Self-Caterers

Reforms to non-domestic rating system: The Barclay Review of Non-Domestic Rates and the Non-Domestic Rates (Scotland) Act 2020

The Minister for Public Finance and Migration has written to all ratepayers regarding reforms to the non-domestic rating system. These letters are being sent out by Scottish Assessors.

These reforms are not related to COVID-19 but will have significant implications for the non-domestic rates system and all ratepayers (including proprietors of non-domestic properties) are encouraged to familiarise themselves with the changes outlined in this letter.

 

Dear Proprietor/Tenant/Occupier,

As a proprieter, tenant or occupier of a non-domestic property, your property will be liable for non-domestic rates (sometimes described as business rates), unless it qualifies for an exemption or relief (for example, the Small Business Bonus Scheme). Non-domestic rates are administered and collected by councils.

In response to concerns associated with the non-domestic rates system in Scotland, the First Minister of Scotland established an independent review group (the Barclay Review) in 2016 to consider how the rates system could better support business growth and long-term investment, and reflect changing market places.

The Scottish Government accepted the majority of the recommendations of the Barclay Review of Non-Domestic Rates and the Non-Domestic Rates (Scotland) Act 2020 was passed by the Parliament on 5 February 2020.

This letter highlights some of the relevant reforms of the Act and other key changes to the non-domestic rates system that will come into effect before the next revaluation date.

Ben McPherson
Minister for Public Finance and Migration

 

Questions and answers on reforms to non-domestic rating system

How will the reforms improve the non-domestic rates system?
Revaluations will be carried out more frequently – every three years (instead of five) from the next revaluation. This will help ensure that rateable values of properties will be much more closely aligned to current market values, thereby reducing volatility in rateable values and making the system more flexible to changing economic circumstances.

A standardised bill has been introduced by councils to improve clarity and consistency across Scotland.

Councils are processing refunds to ratepayers for overpayment of rates more quickly.

Assessors are moving towards greater transparency across the country, including improvements to the www.saa.gov.uk website.

Assessors will be required to provide more and clearer information to ratepayers on how a property’s rateable value has been calculated from the next revaluation.

What am I legally required to do?

  • Valuation

Assessors require accurate information to carry out property valuations. You are legally required to provide the information when it is requested of you within 28 days. Failure to respond within that period may result in a civil penalty and continued failure to respond may result in an increased penalty. Failure to respond within 84 days may see you becoming liable for a penalty equivalent to 71% of the rateable value of the property.

Assessors may request information from a proprietor, tenant or occupier of a property as well as any other relevant person. If you receive a request for information from an Assessor and do not hold the information requested, please contact the Assessor immediately.

  • Billing

From 1 April 2021:

Councils may request information from a proprietor, tenant or occupier. You must respond to this request within 21 days. Failure to do so will result in a civil penalty of up to £370 you must notify your Council of a change in occupier of a property within 42 days. Failure to do so will also result in a civil penalty of up to £370 from 1 April 2021 and councils will be able to initiate debt recovery as soon as payment of any instalment is missed

How is the appeals system changing?

From 1 April 2022, a new two-stage appeals system will be introduced to encourage earlier resolution of any disagreement between the Assessor and the proprietor, tenant or occupier without the need to use the formal appeals process. The reforms are also intended to speed up access to justice for those properties that continue to require an appeal hearing.

For the next revaluation, Assessors will be required to provide more and clearer information to proprietors, tenants and occupiers on how a property’s rateable value has been calculated. It is hoped that this clarity will reduce reliance on the formal appeals system to understand how a property has been valued.

Self-catering accommodation

In order to be classed as a non-domestic property and liable for non-domestic rates instead of Council Tax, from 2021-22 onwards a self-catering property will be required to provide evidence of 70 days of actual letting as well as 140 days of intention to let. Councils will have some discretion to change that criteria in exceptional circumstances.

Further information

You can approach your Council or Assessor with any questions you may have in relation to the reforms delivered by the Barclay Review or the Non-Domestic Rates (Scotland) Act 2020.
Read more about the non-domestic rates system, including the revaluation and appeals process.

The Scottish Government announced in the Programme for Government 2020 that it would make legislation to amend the next non-domestic revaluation date from 1 April 2022 to 1 April 2023. This is the date at which all non-domestic properties are reviewed.

Exemptions to Travel

Parliamentary Questions:  Necessary Repairs to Holiday Homes

Alex Cole-Hamilton (Edinburgh Western) (Scottish Liberal Democrats): To ask the Scottish Government what its position is on whether repairs that need to be carried out in holiday homes should be classed as an exemption to the restrictions regarding travelling to and from level 3 local authority areas.

Fergus Ewing: Necessary repairs to holiday homes can proceed as required in level 3 local authority areas. Although there is no specific reference in the guidance for conducting maintenance in a holiday or second home, contractors are still able to enter for maintenance purposes. In level 4 however contractors can only carry out essential maintenance. In this level, a person should only travel to a holiday or second home where essential repairs or maintenance are required. The guidelines are clear that for safety, people should avoid all unnecessary travel in level 3 and 4 and exemptions should not be used as loopholes.

For more information:

The Health Protection (Coronavirus)(Restrictions and Requirements) (Local Levels) (Scotland) Amendment (No. 3) Regulations 2020 BKW 191120