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Month: May 2022

Fife Council Consultation on Short-Term Let Licensing Additional Conditions

Posted on by Fiona Campbell

Fife Council seeks the views of people and organisations to help shape the Short-term Let Licensing Scheme. Our online consultation survey is now available at the link below. The purpose of the survey is to consider which discretionary elements of the legislation should be included to reflect the Fife context.

The discretionary elements include issues such as:

  • Anti-social behaviour
  • Privacy and security
  • Overcrowding
  • Noise and nuisance
  • Littering
  • Repairs and maintenance
  • Damage
  • Unlawful activity

The survey will take 10-15 minutes to complete and individual responses will be treated confidentially.

The consultation will close on Sunday 12th June.

Click on this link to be taken to the survey

This ASSC has responded to the survey, and you can access our submission here: ASSC Submission to Fife Council Short Term Let Consultation

What are the positives of short-term letting?

Self-catering provides a £867m per annum boost to the Scottish economy, benefiting local communities the length and breadth of Scotland, supporting 23,979 FTE jobs. Given the importance of this sector to the Scottish tourism industry, which has experienced such a challenging time due to the impact of Covid-19, an appropriate regulatory balance is a necessity, as is a supportive environment to help businesses recover and flourish. The recovery of Scottish tourism will benefit small businesses, while responsible and sustainable tourism can help communities to recover too.

For Fife alone, Frontline Consultants have estimated that the traditional self-catering industry provides a £26m annual boost to the local economy [1] and the sector important source of accommodation for major events within the local council area, but also for any overspill from those held in Edinburgh. Tourism in Fife contributes approximately £566m annually to the Scottish economy, providing 9% of all employment in Fife [2], and the ASSC are proud of our members contribution towards this.

Short-term letting also adds to the diverse range of accommodation available within Fife and responds to consumer trends towards more authentic local experiences. The fact that consumer trends are shifting towards short-term lets and self-catering is illustrated by the fact that hotel chains are moving into this market and why they list rooms on popular booking platforms like Airbnb and Booking.com.

Traditional short-term letting activity, such as self-catering, is a small business like any other, with dedicated full-time professionals striving to provide positive experiences for guests and visitors. Given the competition to maintain standards, holiday let owners often spend money more frequently on additional property maintenance than they would on their own property. Their guests spend money in local food shops, cafes, gift shops, galleries, restaurants, tourist attractions etc – many of which would simply be unviable without visitor spending.

Therefore, the impact of STL regulations with the aim of reducing the number of properties, will not be limited to self-catering and short-term letting overall as there will be a significant negative impact to businesses in the wider supply chain. This emphasises the value that short-term letting provides to the wider economy (especially within the context of Covid recovery) from the operators themselves, with negative knock-on effects on hospitality, local activity providers and local attractions. There will also be a negative impact on laundry providers and cleaning services and guests, not to mention property managers, and the onward tech supply chain.

Finally, for Scotland, and indeed Fife, to remain competitive as a leading tourism destination, it needs to be responsive and adaptive to consumer trends, both in respect of the range of accommodation available, as well as for more environmentally conscious options. Holidaying within Scotland, rather than jumping on a plane to a resort overseas, should not only be encouraged during a global pandemic – but as an environmental, social and economic positive going forward. Self-catering properties can, therefore, be viewed as a solution to sustainability, not the problem.

Indeed, as one of our members – Louise Dickins (owner of Dickins Edinburgh Ltd) – so ably put it: “Quite often in our rural locations [self-catering units) are the main choice of where to stay. And they’re an opportunity to stay in the heart of nature. They’re affordable to families too. Scotland is one of the most beautiful countries in the world and so we’re so lucky across the UK to be able to holiday here and not damage the planet in the process.” [3]

We believe that traditional self-catering provides both economic and environmental benefits for communities and the country as a whole. However, in order to ensure benefits are realised, self-catering needs to be actively encouraged as a sustainable option for travellers and an enabling regulatory landscape, not a draconian one, is critical.

[1] Frontline Consultants, Economic impact of Self-Catering Sector to the Scottish Economy (2021). Url: https://www.assc.co.uk/policy/economic-impact-study-self-catering-worth-867m-to-scottish-economy/

[2] Fife Tourism Partnership, Fife Tourism and Events Strategy 2019-2029. Url: https://www.fifetourismpartnership.org/site/assets/files/6214/fife_tourism_events_strategy_2019_29_digital-1.pdf

[3] ASSC, ‘Short-Term Lets Vital for Sustainable Tourism in Scotland’, Jan 2021. Url: https://www.assc.co.uk/short-term-lets-vital-for-sustainable-tourism-in-scotland/

What are the negatives of short-term letting?

Tourism is a mainstay of the Scottish economy; and self-catering is hugely important to Scottish tourism in terms of jobs, revenue, and world-class experiences offered to guests. To be such an essential part of Scotland’s tourism mix is even more remarkable for our sector when most self-caterers operate small or micro businesses. Our professional self-caterers are diligent and considerate business owners who are too often unfairly maligned. They do not, for example, ‘hollow out communities’, as some have claimed, but rather are part of local communities across Scotland and have been for many, many years.

The ‘negatives’ concerning short-term letting are often based on hearsay. Sadly, in recent years, due to the rise of the collaborative economy and online accommodation platforms, negative attitudes have increased with a hostile media and political climate which has been detrimental to hard-working professional self-catering operators who have operated in Fife for decades with minimal complaints or issues. This climate has, in turn, impacted upon community cohesion and led to bad policy decisions where short-term lets are used as a convenient scapegoat for long-term failures to address housing challenges within Fife and the rest of Scotland. We would respectfully encourage an evidence-based approach to short-term letting – as well as a holistic approach to tackling housing challenges – and not one that relies on perception or anecdote.

‘Bleak’ summer ahead for Scottish tourism as 300 hotels on market

Posted on by Melanie Allen
The Herald – 26 May 2022
Stephen Leckie, great, great, great, grandnephew of founder of Crieff Hydro, Henry Meikle, with wife and director Fiona
THE Scottish tourism industry is braced for a difficult first full summer coming out of coronavirus with major staffing problems, rising costs and fewer bookings than expected creating a challenging backdrop this year.
However, despite short-term hurdles, the hotels sector is seeing positive activity and scope for opportunity with almost 300 Scottish hotels and guest houses on the market, according to one listings site.
While the shortage of 45,000 hospitality is unlikely to be dented this year, a successful 12 months ahead buoyed by more international visitors would be expected to lay strong foundations for future trading for existing operators, while a fluid market is attracting interest from south of the Border and also from Asian investors.
Stephen Leckie, owner of eight hotels in the Crieff Hydro group and chairman of the Scottish Tourism Alliance, said: “It is not a disaster, but it is not the growth we would like to see coming out of Covid.
“If you are a honeypot destination, Inverness, north coast, NC500, the highlands the islands, Skye, business is good. If, however, you are in cities or in every other part of Scotland, it is tough.”
He said: “It is pretty bleak, I have to say, it is not great reading, for tourism as a whole, hospitality as a whole. Costs have gone up much more than anybody anticipated. Some are saying they just cant afford to open the doors. The Covid situation is still nowhere near gone.”
He said: “The lack of staff is significant. Some say 2025 before it really builds back, others might say next year, maybe, but what we are hoping for is that this summertime it will come back. The business will come back, but the staffing won’t come back this summertime.”
He said: “The cost of doing business is going up. Our insurance has gone from £400,000 four years ago, to £1.1m, for basically the same thing. The electricity bill increase last year was £600,000, this year we budget £1.5 million.”
However, the buying and selling market is vibrant, according to experts.
Stuart Drysdale, of specialist hospitality agency Drysdale and Company, said investors from south of the Border and corporate groups are among those active in the Scottish market. He said: “People are selling residential properties down south, especially in the south-east, and buying small hotels.
“We have seen that that sort of lifestyle/relocation market is quite good, and the larger stuff with a lot of new investors to the market, so private equity firms.
“With the recent sales of Fonab Castle and Dunkeld House, these are big institutions that have bought these that are really confident in them and the hospitality market.
“The private investors and private equity funds are paying good levels of prices for opportunities.
“For private individuals it is whether they can get the funding to meet the aspirations of the selling party.”
Gary Witham, Christie & Co hospitality director, said: “It’s a whole variety from small 10-15 beds, what we would call lifestyle businesses, up to a 100-plus city centre hotels which you would see more as a corporate type offering. A typical one would be in the £2-10m bracket, small corporates, often high net worth individuals.
“What we are seeing in those sorts of markets is people will look back at 2018
and 2019 and get a good feel for what a mature trading profile looked like and then they’ll look at the last 12 months and say how has the hotel bounced back post the worst Covid restrictions and take it from there.”
He said: “Over the last few months we have started to see money coming back from south-east Asia and China, investors over there looking for opportunities. Hotels in Scotland typically will give a better return initially pricewise than the equivalent property in England.”
Tony Spence, of Christie & Co, said: “If we had to get one word out to vendors who are looking to maybe sell, this is the right time. There are certainly opportunists out there.”
We have started to see money coming back from south-east Asia and China

 

Wales Announces Changes to Self-Catering Thresholds

Posted on by Fiona Campbell

The Welsh Government has announced a change in the classification of self-catering accommodation for local tax purposes (by Rebecca Evans MS, Minister for Finance and Local Government, 24 May 2022)

“On 2 March 2022, I announced the next steps being taken by the Welsh Government, following our consultation on local taxes for second homes and self‑catering accommodation. The steps form part of our plans to ensure property owners make a fair contribution to the communities where they have homes or run businesses. This work, in turn, is part of the Welsh Government’s three-pronged approach to addressing the impact that large numbers of second homes and holiday lets can have on communities and the Welsh language.

The views conveyed in the consultation, including those from respondents representing the wider tourism industry, clearly support a change to the criteria for self-catering accommodation to be classified as non-domestic. Respondents were of the view that the majority of genuine holiday accommodation businesses would be able to satisfy increased letting thresholds, and a wide range of possible alternatives was suggested. Increasing the thresholds will provide a clearer demonstration that the properties concerned are being let regularly and are making a substantial contribution to the local economy.

Following our consultation, the Welsh Government is of the view that properties let out as self-catering accommodation on an infrequent basis should be liable for council tax. Increased letting criteria will ensure that self-catering properties are classed as non-domestic, only if they are being used for business purposes for the majority of the year.

I, therefore, announced an increase to the number of days, within any 12-month period, that a self-catering property is required to be made available to let, from 140 to 252 days, and actually let, from 70 to 182 days. A technical consultation on the draft Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 (“the Order”) ran from 1 March to 12 April 2022. The consultation sought views on the clarity and practical application of the draft legislation. I have published a summary of responses.

Responses to the technical consultation did not raise any issues of technical clarity that are considered to require amendment of the draft legislation. I am today confirming that the Welsh Government will proceed with the legislation as drafted and consulted upon. The Order will come into force on 14 June 2022 and have practical effect from 1 April 2023, applying the amended criteria from that day onwards. Property owners intending to meet the amended criteria should aim to do so during the 2022-23 operating year, but compliance with the criteria will not be assessed until after 1 April 2023.

I recognise the strength of feeling among self-catering operators and have listened to the representations from individual businesses and industry representative bodies. There is limited evidence available in relation to some of these considerations and I am grateful to the sector for providing additional information they have gathered from their members. This has been taken into account in completing the Explanatory Memorandum and Regulatory Impact Assessment, which makes use of the available evidence. I recognise that the stronger criteria may be challenging for some operators to meet. The purpose of the change is to help ensure property owners are making a fair contribution to local communities, for example by increasing their contribution to the local economy through greater letting activity or by paying council tax on their properties. The Welsh Government’s policy priority is to support sustainable communities and affordable housing, as set out in our three-pronged approach.

The Welsh Government recognises that some self-catering properties are restricted by planning conditions preventing permanent occupation as someone’s main residence. The Council Tax (Exceptions to Higher Amounts) (Wales) Regulations 2015 provide for an exception from a council tax premium for properties restricted by a planning condition preventing occupation for a continuous period of at least 28 days in any one‑year period. In light of the changes we are introducing to the letting criteria, I am also exploring whether further amendments to these regulations are necessary in advance of the changes taking practical effect.

I will also be issuing revised guidance to local authorities on additional options that are available in the event that self-catering properties restricted by planning conditions do not meet the letting criteria.

As part of the Co-operation Agreement with Plaid Cymru, we are committed to taking immediate action to address the impact of second homes and unaffordable housing in communities across Wales, using the planning, property and taxation systems. As we continue to progress the package of measures and drawing on the latest evidence base, we will keep under constant review the whole range of levers available to use and how they may be deployed most effectively to meet our policy objectives and avoid any unintended consequences.”