Opinion Piece: Guilty as Charged

“As the newly appointed Chair of the leading trade body representing the Scottish self-catering sector, I am growing increasingly alarmed at the claim being made by some of our national and local politicians that licensing of short-term lets will help to improve access to affordable homes, despite assurances from the Cabinet Secretary for Housing in October, when over provision was removed from the draft SSI, that the rationale behind the proposals is not in fact driven by housing concerns.

“My first question in response to this claim is: how? Given the pronouncements made it is patently obvious that the claimants have not read the detail of the proposed regulations and paid scant attention to the deluge of evidence provided by the ASSC and the wider tourism sector.

“To be blunt, STL licensing is an irrational, illogical, and anti-business policy which has no chance of improving access to affordable homes.

“In a recent article in The Oban Times, the Convenor of the Holyrood Local Government, Housing and Planning Committee states that “the high number of short-term lets in popular tourist spots is leaving people struggling to find somewhere to live.” In that same article a Green Party spokesperson states that “it is time that short term lets are regulated to ensure that long-term housing is available and affordable for residents.” Other politicians representing areas from the Highlands and Edinburgh continue to make similar assertions, despite there being not a shred of evidence demonstrating a direct correlation between the concentrations of self-catering and bed and breakfast provision and the availability of affordable homes. Worse still, promulgation of the link between the two and the claim that licensing will solve the problem gives false hope to those individuals and businesses suffering the very real difficulties caused by the housing crisis. As such the politicians involved are stoking division and having a detrimental impact on community cohesion by persisting with their baseless attack on the livelihoods of thousands of micro-businesses across Scotland.

“The Scottish Government’s stated intention for STL licensing is that it will make sure short-term lets are safe, it will help with issues faced by neighbours from short-term lets, and it will help councils know and understand what is happening in their areas. It therefore seems that the micro and small businesses involved are being asked to pay for a data gathering exercise that may result in their being denied continuation of their livelihoods.

“It seems unlikely that even the advocates of this legislation can believe that it will have any measurable impact on the availability of affordable housing. The reason being that, on their own admission, the Scottish Government has no evidence or data to suggest it will. It seems, therefore, that those who believe regulation can achieve that ambition are highly likely to be sorely disappointed. To state otherwise seems disingenuous at best.

“The housing crisis is precisely that – a crisis. The conclusion that the licensing of legitimate micro self-catering businesses and bed and breakfasts can play even a minor role in solving the problems involved is no more than rhetorical hot air. The spike in house prices over the last two years has had nothing to do with short-term lets. According to local estate agents in the Highlands, the majority of property sales have been to people who want to move from the south to live permanently in local communities. The housing market is badly overheated with no shortage of purchasers who have no intention of letting their homes to tourists. Licensing will not make any difference to this economic reality in a post-Covid world. It’s also relevant that there has been a significant increase in the numbers of bed & breakfasts and guest houses coming on to the market and there is evidence to indicate that the prospect of licensing has prompted their owner’s decision to sell. As currently proposed licensing will have no impact on second homeowners who choose to leave their property empty for 40+ weeks of the year. To suggest otherwise is mere speculation.

“Meanwhile, there are politicians representing Highland and Edinburgh who accuse the ASSC of being protectionist in our call for the replacement of draconian licensing arrangements with a more proportionate registration scheme.

“If it is protectionist to point out that STL licensing will not produce any improvement in the availability of affordable homes, then – guilty as charged.

“If it is protectionist to point out that 55% of our members earnestly believe that the uncertainties inherent in a licensing scheme will force them to close their business, then – guilty as charged.

“If it is protectionist to point out that over 70% of self-catering and bed and breakfast operators and staff are women and licensing will have a disproportionate impact on their costs, workloads and subsequent livelihoods, then – guilty as charged.

“If it is protectionist to point out that at a huge majority of self-catering and bed and breakfast operators are owner occupiers living in their local communities and they will be the most detrimentally affected by Licensing, then – guilty as charged.

“If it is protectionist to point out that Local Authorities will need to recruit dozens of permanent new staff to set up and implement a Licensing scheme, following years of public service austerity and when Covid recovery has barely begun, then – guilty as charged.

“Perhaps local Councillors need to consider how this fact is presented to their electorate prior to the Local Government elections next May. Presenting licensing as a justified response to the housing crisis may be a difficult case to make in these circumstances.”

Adrienne Carmichael, Chair, Association of Scotland’s Self-Caterers

4th November 2021

Adrienne Carmichael Opinion Piece November 2021

ASSC SURVEY INTO THE COST OF COMPLIANCE OF EXISTING LEGISLATION

The ASSC issued a snap survey seeking insights to further inform the Scottish Government and industry on the cost of compliance of existing legislation for small tourism accommodation businesses.

In 22 hours, the survey generated 336 responses from businesses in 26 out of 32 local authorities. 53% were from members of the ASSC and 47% responses were from non-members.

Some of the key findings include:

  • The vast majority of respondents identified that they came from rural areas / islands (81%).
  • 75% or respondents report turnover of under £50k per annum, and 43% under £20k per annum. 
  • The June 2021 BRIA calculated the total compliance costs to be circa £963.00.
  • Real costs identified by operators are three times those identified in the BRIA, illustrating an average cost of £2,969. This will, of course, vary according to urban / rural / remote / island operations.
  • The costs identified in this survey do not include additional costs for ‘Information to be Displayed’, plans to show ‘maximum occupancy’, and other new costs associated with the proposed licensing regime.
  • 76% of respondents’ report increases in operating costs of between 11-75%. The key driver is the pandemic in terms of additional cleaning times, operators leaving fallow days to ensure guests safety, the cost of materials and labour, extra linen costs, plus the need for relaxed cancellation policies.
  • The cost of doing business generally has risen exponentially since the pandemic: “Gas bills have increased by 18%. Electricity bills have increase by 15%. Insurance has increased by 15% and cover has reduced.”

Fiona Campbell, CEO of the Association of Scotland’s Self-Caterers, said:

 “Small tourist accommodation businesses such as self-catering, bed and breakfasts and guest houses have been the backbone of Scotland’s tourist industry for generations.

Professional small businesses – who already comply with numerous regulations – are under threat from an onerous and bureaucratic licensing scheme. This comes at a time when the sector can least afford it as many businesses are still in survival mode due to the pandemic. Instead of burdening operators, policymakers should instead look to protect businesses and livelihoods at this critical phase of Covid-19 recovery with a proportionate and targeted compromise with their proposed legislation.

The ASSC’s exemption proposal for registered accommodation ensures the appropriate regulatory balance – one which supports jobs and livelihoods but also secures the Scottish Government’s policy objectives in a more proportionate and cost-effective manner for those already complying with the proposed mandatory licensing conditions.”

Read More: Cost of Compliance

Housing and Short-Term Lets in Scotland: The Facts

Short-term lets are often presented as being a leading cause of Scotland’s housing crisis. However, it is important to place the debate in a holistic context – for instance, noting the number of empty homes in Scotland, demographic changes, and the need to build more homes – while recognising the value of tourist accommodation to the Scottish economy and local communities.

The ASSC welcomes the opportunity to share data about the holiday let sector which we believe will contribute to a more informed conversation about the appropriate regulatory framework.

Self-Catering in Scotland

  • Self-catering properties have been a longstanding presence in communities for generations, especially in rural/remote communities, and provide an economic boost for local areas and enhance Scotland’s tourist accommodation offering.
  • Latest figures show there are 17,794 self-catering units on Non-Domestic Rates. These properties generate: 4 million visitor nights per year; £867.1m total visitor spend; and support 23,979 FTE jobs.[1]
  • Such self-catering properties are legitimate, bona fide businesses whose owners depend on the money generated for their livelihood – it is not a hobby or a way to supplement their income. This is entirely separate from the ‘homesharing’ concept, or those amateur operators who utilise online marketing platforms but are not subject to the same levels of existing regulation.

The Need for Robust Empirical Data

  • Underpinning any decision to regulate the short-term letting sector is the need for robust, empirical data. Unfortunately, there has been a tendency to focus on scraped data from Airbnb – based on inaccurate information and flawed methodologies – leading to misleading conclusions about the nature of the short-term letting landscape.[2]
  • The ASSC is not averse to regulation and has proactively shared evidence-based policy papers and recommendations[3] since 2017 about the nature and scale of short-term letting in Scotland but unfortunately this has been ignored by a focus on this unreliable data from one marketing platform.
  • The Scottish Government’s draft BRIA for short-term let licensing references research noting that there were approximately 32,000 active listings on Airbnb in May 2019.[4] However, this does not mean that there are 32,000 short-term lets which would be readily available on the long-term housing market as many have erroneously claimed.
  • The number of listings on online platforms in any given area is not necessarily an indication of impact on long-term housing. For example: (a) many of these properties are already the primary residences of individuals involved in ‘homesharing’ who share a room(s), or their entire home while away; (b) each listing does not represent a single housing unit. A property can have multiple listings; and (c) marketing platforms like Airbnb contain a diverse range of accommodation including hotels and B&Bs, as well as unconventional accommodation like yurts, barns, boats, and campervans and one train, which cannot be seen as housing stock.
  • Parliamentary answers from the Scottish Government[5] confirm the BRIA figures were from scraped data provided by InsideAirbnb (not from Airbnb directly) and that they could not break this down by property type – be it a single/shared room, entire property, or unconventional accommodation. This means the estimation there are 32,000 “short-term lets” is wholly unreliable. It is also based on pre-pandemic 2019 figures. Moreover, they admit we do not have an estimate of how many short-term lets will return to the long-term housing market.”[6]11

A Holistic Discussion on Housing

The housing challenges facing Scotland are far more multifaceted than the existence and growth of short-term and holiday lets alone. For instance:

  • There are currently 47,333 empty houses in Scotland (of which 7152 are in Edinburgh, 3536 in Glasgow, 2943 in Fife, 2595 Highland).[7] These empty homes could be utilised for far more productive purposes and provide homes for those who need.
  • The number of households in Scotland continued to increase in 2020, reaching 2.51 million. This was an increase of 142,800 (6%) since 2010. The growth in the number of households is partly due to an increase in the population, but also because people are increasingly living alone or with fewer other people. More than a third of households are single person households. An estimated 900,000 people are living alone.
  • There were 2.65 million dwellings in Scotland in 2020. Of these, 90,500 dwellings (3%) were vacant and 24,500 (1%) were second homes.[8]
  • Empty and second homes are concentrated in different parts of the country. For example, remote rural areas have a higher percentage of empty and second homes than urban areas[9]. However, City of Edinburgh is a hotspot for empty homes in Scotland.
  • 172,170 houses were built between 2010-2019 (18,118 in Edinburgh)[10] – and we need many more. Homes for Scotland have argued that Scotland has amassed a housing shortfall of 85,000 homes and that we need to build at least 25,000 per year to meet the demands of our population.[11]
  • Progress on housebuilding is not fast enough. For instance, the Scottish Government have only spent half of their £25m Rural Housing Fund which aims to build affordable homes in rural areas.[12]
  • City of Edinburgh had the largest increase in absolute number of households (17,300), an increase of 8%.[13]
  • Over the last ten years, the proportion of dwellings which are second homes has increased in five council areas and decreased in 24 council areas.[14]
  • When housing demand and the level of empty housing is set against the number of self-catering units, it suggests self-catering activity is not of a scale sufficient to affect housing supply issues in Scotland. Ultimately, building too few homes remains the core cause of Scotland’s housing problems, not the holiday let sector.

Conclusion

  • Policymakers should not use holiday accommodation as a means to solve housing challenges in Scotland, instead focusing on building more affordable homes and tackling the scourge of empty properties.
  • Any short-term let regulations taken forward, either at a national or local level, need to be informed by robust empirical data. Scraped data from online platforms can lead to misleading conclusions about the nature of the short-term letting market.
  • The Scottish Government’s BRIA accompanying their licensing proposals states: “A benefit of licensing will be improved access to affordable rented homes.” This claim is entirely unfounded and lacks an evidence base.
  • Any housing issues in relation to short-term lets should be addressed by the Planning Act 2019 – through the introduction of control zones underpinned by robust quantitative data – and should not play a part in the licensing proposals which are meant to focus on health and safety.
  • Small businesses like self-catering, present in communities for decades, should not be used as a convenient scapegoat for wider failures in housing policy.
  • The Scottish Government needs to back legitimate professional businesses and our renowned tourism sector as we recover from the effects of Covid-19, allowing visitors at home and abroad to benefit from our unique hospitality and fantastic range of accommodation.

Footnotes

[1] https://www.assc.co.uk/wp-content/uploads/2021/08/Economic-Impact-Study-%E2%80%93Scotland-Report.pdf

[2] This is evident in both the Scottish Government’s BRIA accompanying their licensing proposals, as well as City of Edinburgh Council’s plans for a short-term let control area.

[3] For instance, see ASSC, Far More Than Just Houses: The Benefits of Short-Term Rental in Scotland (2018). Url: https://www.assc.co.uk/wp-content/uploads/2018/06/MoreThanJustHouses.pdf; and ASSC, Forward Together: A Collaborative Approach to Short-Term Letting (2020). Url: https://www.assc.co.uk/wp-content/uploads/2020/12/2020_ForwardTogether.pdf

[4] https://www.gov.scot/binaries/content/documents/govscot/publications/impact-assessment/2021/06/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria/documents/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation/govscot%3Adocument/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation.pdf

[5] Parliamentary answer to S6W-02111. Url: https://www.parliament.scot/chamber-and-committees/written-questions-and-answers/question?ref=S6W-02111

[6] Parliamentary answer to S6W-02109. Url: https://www.parliament.scot/chamber-and-committees/written-questions-and-answers/question?ref=S6W-02109

[7] https://goodmove.co.uk/empty-housing-hotspots/

[8] Vacant properties include those classified as:  long-term (six months or more) empty (47,300, 1.8% of all dwellings); unoccupied exemptions (43,200, 1.6% of all dwellings) such as new homes yet to be occupied and dwellings undergoing repair or awaiting demolition. See: https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf

[9] https://www.nrscotland.gov.uk/statistics-and-data/statistics/statistics-by-theme/households/household-estimates/2020

[10] https://www.gov.scot/publications/housing-statistics-for-scotland-new-house-building/

[11] https://yourviews.parliament.scot/session-5/local-gov-sustainability-covid/consultation/download_public_attachment?sqId=question-2020-06-10-3171498657-publishablefilesubquestion&uuId=866941340

[12] https://www.thecourier.co.uk/fp/politics/scottish-politics/2493715/snp-ministers-under-fire-over-failure-to-spend-25-million-rural-housing-fund/

[13] https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf

[14] https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf