B&B Blog

News and updates from the Bed & Breakfast Association

Thursday 7 January 2021

B&Bs in Scotland: the new 'Short-Term Lets' licensing law may affect YOU: act before 22nd January

As we told members at the end of last year, we are very concerned at the way the Scottish Government is choosing to regulate "short-term lets" (STLs).

 The original intention was to tackle the very real problems which have arisen (especially in cities like Edinburgh) as a result of the explosive growth of unregulated accommodation on platforms like Airbnb. These represent a danger to consumers, a nuisance to neighbouring residents  - and of course, very unfair competition to B&Bs who comply with existing rules and are checked and inspected for fire safety etc.

As our members will know, one of our campaigns since 2012 has been to level the playing-field between bona fide B&Bs and platforms like Airbnb. We urged the Scottish Government (including in our original submission to their consultation process back in July 2019) to look at the option of a low-cost, light touch accommodation registration scheme.
Our fear was that the Scottish Government's preferred option of a licensing scheme would be unwieldy, expensive and onerous, and would be likely to have unintended consequences.

Despite our clear submissions in 2019, the Scottish Government then decided to proceed with a licensing scheme for STLs, and asked for further comments on this last October.  In our submission then, we answered as follows:

We made a fuller submission at an earlier stage of this process (July 2019), and are NOT generally in favour of the approach now chosen; hence this brief submission confines itself to remaining points within the remit of the current consultation.

As we understand it, UCO "Class 7" (Hotels and hostels) are excluded from the definition of a "short term let" under 4.7. These are premises used "as a hotel, boarding house, guest house, or hostel".

We would like to clarify that this means that "traditional" B&Bs and guesthouses are NOT subject to the proposed legislation on short-term lets.

Should a B&B or guesthouse happen NOT currently to be classed under "Class 7", we would like it clarified that the application for change of use class to Class 7 will be expedited by the appropriate planning authority, to avoid businesses not intended to be subject to these regulations being drawn in.

3 Please identify any issues with the proposed licensing order as set out in chapter 6, and how to resolve them.

We have never been in favour of a licensing scheme, preferring a low-cost registration scheme. However, if a licensing scheme has been decided on, we strongly advise that thought be given to making it affordable to micro-businesses. The regulations seem to provide for the relevant department to decide how much to spend, then divide that figure by the number of properties and charge accordingly.

To us, that is a recipe for over-spend in cost and consequently for very small enterprises to be hit with punitive charges as the price of doing any business at all. That would be unfair, disproportionate and damaging to Scotland's economy and to tourism.

The main purpose of this regime (we believe) should be to bring accommodation on "peer to peer platforms" - which come within the definition of "short term lets" - into a comparable safety compliance, inspection and enforcement regime as that currently applied to our members (B&Bs & guesthouses). The licensing scheme should NOT be aimed at being financially punitive.

The license fee for the smallest properties/businesses should be set bearing this in mind, and after consultation with industry representatives - and kept under review. 

We understood that the Scottish Government's original intention had been to target the new STL rules at the risky short-term lets causing the problems - ie those on the platforms which are unchecked and unregulated. But the legislation they have now drawn up will catch small B&Bs too: ie those of "Class 9" (houses) under the Use Class Order (UCO). 

UCO 9 allows a householder in Scotland to offer bed and breakfast without planning permission "where no more than two bedrooms are used for this purpose or, in the case of premises having less than four bedrooms, only one bedroom is used for that purpose". It looks as if all small B&Bs in this category will have to apply for the new licence. We are very disappointed that the Government has taken this course, and will be pressing for changes. 

Our colleagues at the Association of Scottish Self-Caterers (ASSC) - who also represent thousands of existing home-based micro-businesses in Scotland - have similar views to us on the principles of this issue and the mistaken (in our view) path the Scottish Government has embarked upon.
The ASSC has written a very useful summary of the implications for B&Bs of the Scottish Governemnt's STL regulations, which we urge you to read - it is here:

Do particularly look at the licensing scheme's onerous demands such as around EPC certificates - this will be a disproportionate and unnecessary burden on small B&Bs in older or historic buildings.  The ASSC outlines these requirements on the page linked above.
A catastrophic "Double Whammy": 
All the B&B owners in Scotland we have spoken to are understandably very concerned that the poorly-drafted “Short-Term Lets” licensing legislation would be hugely onerous to microbusinesses across Scotland, and would be a catastrophic “double whammy” after these very same small family businesses have been so disproportionately hit by Covid-19.

Our (UK-wide) member survey in December found that on average, B&Bs had their sales turnover in 2020 down 60% on 2019; the ONS showed UK GDP* was down 8.6% in 2020 - so that means that B&Bs and guesthouses have been hit seven times harder than the economy as a whole.   Hence the need for very targeted support measures to aid recovery, NOT for onerous and costly new burdens on micro-businesses that are already complying with health and safety regulations.
* 3rd quarter 2019 - 3rd quarter 2020, ONS
The Bed & Breakfast Association told the Scottish Government from the beginning that a simple, low or no-cost, light-touch registration scheme for tourism accommodation would enable consumers to be protected and level the playing-field between B&Bs and the currently unregulated accommodation on platforms like Airbnb.  The core problem this licensing scheme was aimed at solving was a very localised one, largely in Edinburgh - but the scheme as drafted will damage small businesses right across Scotland and damage Scottish tourism.

Some comments from our members show the strength of feeling:

“There is no way on gods earth we could continue to trade if this comes into force. Plus in these uncertain times, where we have had no bookings for the past 3 months, despite still being open, is just ludicrous.
If this does go ahead we ( and I’m sure many others) we will have to stop trading, we would be running at a loss.”
A B&B owner in Orkney

“This will be damaging to our business and others alike…  Having been closed for most of the past 12 months and only having one grant from the Government to cover our costs, this will truly put another strain on our already struggling business.”
A B&B owner in Moffat

We hope the current proposals are set aside for a fuller consultation and proper impact assessment before being reviewed and reconsidered.    

What you can do:
1) Please contact your local MSP highlighting the problems with the regulations, quoting as much as you want from the information provided by us and/or the ASSC, noting that one of the unintended consequences of this rushed legislation is that it will affect B&Bs. 
You can find your MSP using the postcode checker tool on the Scottish Parliament website: https://beta.parliament.scot/msps/current-and-previous-msps     
2) Please also email your views to LocalGovernmentandCommunities@parliament.scot  by Friday 22 January.
As detailed on the ASSC summary page for B&B owners (see link  above), the Committee are asking for responses in the form of answers to three specific questions, which are:

1. Do the proposed changes strike the correct balance between protecting the long-term sustainability of local communities and promoting tourism and strong local economies?
2. Has the Scottish Government’s defined short terms lets in a clear and correct way in the legislation?
3. Will local authorities have adequate resources, powers and expertise to make a success of their new powers and duties?


Again, when emailing your responses to the Committee please copy ininfo@scottishbandbassociation.org and  communications@assc.co.uk

If you own a B&B or Guesthouse in Scotland and are not yet a member of the B&B Association (which includes membership of the Scottish B&B Association), there are many reasons to join us - including helping us lobby against onerous and expensive STL rules affecting your business.  You can join us for just over £1 a week (£55 a year) - click here for details.

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