Crackdown on STR hosts in Scotland

Not sure how many folks we have on here from Glasgow (not many I suspect!) but legislation passed by the local authorities in March last year, which was under appeal by a host to the Scottish government, has just been upheld and the hosts appeal denied.

In a nutshell, it is now illegal to rent out (as a whole property) any property with a communal entrance on a short term basis. The host who appealed this legislation has now been served with an enforcement notice to cease all STR activity within 30 days.

The only solution is to apply for a change of use from residential to commercial property, and the council have intimated that in many popular areas, this will be refused.

I don’t know the exact figures, but knowing the city and its STR market, it could affect close to around 30/35% of current hosts including quite a few ā€œPlusā€ listings on Airbnb.

Fortunately, the council have conceded that enforcement will be complaint driven therefore unless someone complains, you may be able to fly under the radar.

From what I have gathered, other local authorities have been observing the appeal before implementing similar legislation.

JF

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Interesting. I wonder why they used ā€˜communal entrance’ as the criteria? I can understand that this would apply to some apartment buildings but I’m surprised that it affects so many hosts. That’s quite an eye-opener.

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Maybe because it is in the affordable housing category, and very popular with investors because of the low maintenance.

It is quite a smart move, it does not hit the classic Holliday rental market, but focusses on the real AirBnB problem:ā€Investorsā€

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I can see the logic in that. A lot of hosts are mentioning a drop in bookings, I suspect it’s down to a flood of new hosts, a lot of whom had snapped up flats - ie, in a building with a shared entrance.
Still ok for people who actually live there to Airb their spare room.

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Hello @JohnF, I don’t host in Glasgow but elsewhere in Scotland. I believe the example you are referring to relates to an appeal against an enforcement notice that the host lost and Glasgow City Council won.

This case did not involve any new legislation being passed by the government, just the council was successful in convincing a planning reporter that a material change of use of the flat to a short term let had taken place. It would only become an offence (which could mean prosecution) if the host does not comply with the enforcement notice or get planning permission for the change of use. It is not illegal to operate a flat as a short term let, without such enforcement action being taken. The use would however be unauthorised if a material change of use had occurred.

You are right, Glasgow City Council are keen to limit these changes for flats in communal buildings as they see the amenity impacts of short term rentals as being detrimental to the other (permanent) residents in the tenements/blocks. They have developed supplementary guidance, which they use when considering planning applications and planning enforcement action alongside their planning policies which sets out their criteria:

https://www.glasgow.gov.uk/index.aspx?articleid=20795

Other authorities will be observing such planning/enforcement appeals as it could influence decisions they have to make. Strictly speaking though, this decision by a planning reporter is not binding on another local authority or other reporters - but it can, and likely will, be very influential. Other similar decisions have also been made in Edinburgh, where similar planning policy exists. The housing shortage in Edinburgh, and to certain parts of Glasgow, does make it more likely that enforcement action may be taken.

Nationally, there is a proposed Bill currently with the Scottish Parliament which would make the use of any residential property (a flat or a house) where the host/owner does not also live (so whole units) ā€˜development’. This would mean that planning permission would be required for such uses, if and when the Bill becomes law. The Bill has been delayed but this provisions seems likely to become law.

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ā€œReal problemā€ is competition that’s not going to go anywhere :). It will only get more fierce.

In my small town in Southern Europe UK based investment funds started pouring millions into STR properties. We all know the source of these funds. They don’t give a shiny shoe about ROI.
The number of active listings quadrupoled in December 2018 vs December 2017! This is the lowest of the low season here now.

Small STR owners close & sell their properties and go to greener more profitable pastures, which are these days are in the countryside outside of major tourist cities as it’s very difficult to compete with investment funds with unlimited amount of cash…

Tip. These funds don’t go to countryside…yet

Do you remember stories how Costco, Walmart killed small businesses in towns. Sooner or later it will be the same with STR.

The good news that property prices are on the rise too. So you can sell yours at a profit and move to a town with uni and start student accommodation business … if nothing else

Merry Christmas to all!