07 Nov 2019
The Scottish Government last week published its report Research into the impact of short-term lets on communities across Scotland. This paints a picture of the effects of home sharing/letting sites such as AirBnb on communities and economies in certain parts of Scotland. Focussing on Edinburgh, Glasgow for urban context and Skye and Fort William for rural, the report brings into sharp focus the economic benefits that are being experienced alongside disruptive impacts on communities and residential markets.
In Edinburgh, pressure for visitor accommodation during its summer and winter festivals leads to hotel occupancy rates in excess of 90%. Airbnb can offer an often cheaper and more flexible alternative which may take some pressure off hotel stock, but also open up our city to new visitors who may otherwise not have visited.
But these pressures are having a reported effect on the supply of housing and cost of rents. As at 25 September, there were 11,985 Airbnb listings in Edinburgh, 7,366 (65%) of which were entire properties. With around 30% occupancy it is evident that many of these cannot be permanent residences for Edinburgh’s population and must be full-time short-term lets. To put this into context, these figures represent 6% and 4% of the total no of privately owned dwellings in the city respectively.
In Skye the report highlights that 18% of all residential dwellings on the island are available for short term let. This has nearly obliterated the private rented sector market, posing problems for existing residents, incoming key workers as well as workers in construction and tourism, industries which are expanding in response to the short term lets that they are hindered by.
The findings of the consultation summarised in the report point toward consensus that regulation is required, but at this stage stops short of specific recommendations. It is interesting that planning controls are scarcely mentioned.
So what might planning do?
Earlier this summer, the Planning (Scotland) Act 2019 introduced the ability for planning authorities to designate all or part of its area as a short-term let control area (STLCA). Within these areas, use of a dwelling for a short term let will constitute a material change of use and require planning permission (unless it is already someone’s principal residence or subject to private residential tenancy). It’ll be ok to let out your spare room on rugby weekends, or even your whole house while you’re on holiday, but buy a flat solely for the purpose of short-term lets and you’ll need planning permission.
The change introduced by the Act does beg the question when is a change of use not a change of use? The answer will soon be, when it is outside a STLCA.
It initially feels as though introduction of regulation such as this would sit better within the General Permitted Development Order (GPDO). Introduction into the GDPO would however result in a blanket approach across Scotland, adding unwelcome regulation in areas where the adverse effects of short-term lets are less prevalent and do not outweigh the economic benefits of increased tourism.
This is a bit of a knotty problem. At present, if it is considered that the introduction of a short term let use represents a material change then it can already be deemed to require planning permission. What constitutes a material change is undefined but can include a number of factors such as frequency of arrivals/departures, number of nights let or impact upon residential amenity. Each individual case must be assessed by the relevant planning authority and there are a growing number of instances where enforcement action has been taken by planning authorities resulting in refusal of planning permission and, in some cases, dismissal of appeals. While these have yet to be tested in the courts, it is evident that the power already exists to deal with problem cases.
These case by case instances do not however address authority/city-wide issues of housing supply, or even community-wide impacts upon amenity and residential character arising as a result of multiple short term lets. This points toward a situation where STLCAs, if used across far reaching areas, such as a whole planning authorities, could in theory provide the control required.
But, this would of course place a significant burden on planning departments through enforcing these controls and considering applications. Where budgets and resources are already stressed it may result in a reluctance to use these powers.
It also raises questions as to what will happen in instances outwith STLCAs, where there has been or will be a material change. By making STLCAs optional and potentially over limited areas means that beyond them the default position will be as existing; demonstrating material change, but with the absence of a STLCA designation further blurring the lines.
I suspect the 2019 Act will not be a silver bullet and the discussion will rage on.
If you have a question about short term lets and Airbnb and the planning position please contact Gordon Thomson in our Edinburgh office.
The Court of Appeal has overturned a High Court decision and concluded that an Inspector should not have altered a description of development in the course of granting a section 73 (s73) planning permission, as it was beyond her powers.
In Finney v Welsh Ministers the High Court had held that it was acceptable for a s73 planning permission to amend a planning permission for a wind turbine so that it would have a 125m blade tip height even though the original planning permission’s description of development referred to a 100m blade tip height. The Inspector removed the reference to blade tip height from the description of development when granting the s73 planning permission (see Lichfields Planning News, December 2018).
Until now, three High Court cases were relevant to interpreting this element of planning law: R v Coventry CC ex p Arrowcroft Group plc (2001) (‘Arrowcroft’), R (Vue Entertainment Ltd) v City of York Council (2017) (‘Vue’), and R (Wet Finishing Works Ltd) v Taunton Deane BC (2017) (‘Wet Finishing Works’).
In Vue, Justice Collins followed Arrowcroft, which in his view established that it is not open to a local planning authority to vary a condition if that variation means that the precise terms of the original permission (i.e. the description of development) were changed by it.
The Court of Appeal judgment in Finney has ruled that the correct approach to determining whether it is appropriate to use a section 73 planning permission to amend a development is Vue; where Wet Finishing Works contradicts Vue it is wrong and consequently the Finney High Court judgment, which followed Wet Finishing Works, is wrong.
When determining a s73 planning application the decision maker must not consider the description of the development to which the conditions are attached, because s73(2) expressly requires the planning authority to "consider only the question of conditions". The Court of Appeal judgment has found that “the natural inference from that imperative is that the planning authority cannot use section 73 to change the description of the development”.
Lord Justice Lewison said:
“If the inspector had left the description of the permitted development intact, there would in my judgment have been a conflict between what was permitted (a 100 metre turbine) and what the new condition required (a 125 metre turbine). A condition altering the nature of what was permitted would have been unlawful. That, no doubt, was why the inspector changed the description of the permitted development. But in my judgment that change was outside the power conferred by section 73”.
With regard to Counsel for the developer’s concerns that some local planning authorities might seek detailed descriptions of development in order to avoid the possibility of a section 73 planning application being submitted to amend a proposal, Lewison LJ found the answer to be straightforward:
“If a proposed change to permitted development is not a material one, then section 96A [a non-material amendment application] provides an available route. If, on the other hand, the proposed change is a material one, I do not see the objection to a fresh application being required”.
Finney v Welsh Ministers and Others (2019)‘A section 73 permission that varies a description of development can be lawful’, Lichfields Planning News, December 2018,Lichfields Planning Matters, A ‘Minor Material’ clarification (discussing ‘Vue’)