Air on the side of caution

On 28 April 2019, the Scottish Government’s Short Term Lets Delivery Group launched a consultation inviting comments on the registration and licensing of short-term letting (STL). The consultation closes on 19 July 2019. Amongst other matters, the consultation specifically invites comments on the restrictions imposed on STL under planning law.

Change of use?

As more and more properties are listed on STL websites, such as Airbnb, the question of whether planning permission is required for use of a residential property for STL is becoming a major issue. Critics of STL argue that use of a property for STL constitutes a material change of use due to the potentially high turnover of occupants and associated amenity issues for neighbours. Meanwhile, those listing their properties for STLs argue that the impact does not differ from ordinary residential occupation, and that fears regarding anti-social behaviour are not planning considerations.

Listing a property on an STL website does not necessarily mean planning permission is required. Ultimately it is for the local planning authority to determine if the use of the property for STL constitutes a ‘material change of use’. This is a question of fact and degree – which means that there is no hard and fast rule.

In the period to 2 May 2019, nine enforcement notice appeals relating to change of use to STL were disposed of by the Scottish Government’s Planning and Environmental Appeal Division (DPEA) (none of which were successful).There are three such appeals pending determination. These appeals provide helpful guidance as to the factors which will be taken into account by decision-makers when deciding if there has been a material change of use.  The majority of properties used for STL are flats rather than houses.

On 8 February 2019, an appeal against an enforcement notice issued by Glasgow City Council relating to use of a flat used for short stay accommodation was dismissed (ENA-260-2106). The Reporter determined that there was “…a material difference in character between the use of the flat as mainstream residential accommodation and its use as short-stay accommodation.” This was on the basis that a long-term resident would be more familiar to other occupants of the building, and would pose less risk, in terms of noise and disturbance, whereas STL causes concerns for other occupants about unknown persons having access to the building.

On 3 April 2019, an appeal against an enforcement notice issued by Edinburgh Council (ENA-230-2147) was similarly dismissed; the Reporter considered that STL use constituted a “pattern of occupation … [which] was very different from that which would be expected if the flat were occupied as mainstream residential accommodation.”

During the appeal the appellant had cited examples of certificates of lawfulness being granted for STL use of formerly residential properties. However, the Reporter distinguished these examples on the grounds that two related to dwellinghouses, and two related to flats with individual access. This suggests that the impact of additional arrivals/departures by guests and cleaners is a major factor in determining that there has been a material change of use.

Change of legislation?

All of the enforcement action taken to date may soon be overtaken by events. The Planning (Scotland) Bill was amended by Andy Wightman MSP at Stage 2 to include a clause which would amend the definition of “development” in Section 26 of the 1997 Act to specify that “the use of a dwellinghouse for the purpose of providing short-term holiday lets” constitutes a material change of use. Whether this survives the anticipated reworking of the Bill at Stage 3 is yet to be seen. If it does, it would represent a step away from the usual ‘fact and degree’ approach to change of use and demonstrate the level of public concern about STL with which the politicians agree.

The European Court of Justice is currently considering a case relating to whether France is entitled to use its current letting regulations to regulate Airbnb. On 30 April 2019, an ECJ Advocate General issued his opinion, advising the Court that Airbnb was a ‘digital service’ rather than a ‘letting agent’. As Airbnb’s European hub is in Ireland, any attempt to regulate Airbnb would therefore be contrary to single market rules regarding interference with cross-border trade. While the Court is yet to issue its own opinion, it usually follows the advice of its Advocate General. This case may have significant implications for the Scottish Government’s consultation on registration/licensing of STL.

If the Scottish Government is unable to regulate STL websites through letting regulations, we may see a rise in the use of the planning system as a means to informally regulate this rapidly growing industry, in the same way that the planning system has been used to informally ban fracking.

Conclusion

There is no easy answer when considering whether a residential property which is being used for STL requires planning permission for change of use. If the property is a flat, and shares common areas with other flats, the trend seems to be that planning permission will be required. If Mr Wightman’s amendment to the Planning (Scotland) Bill makes it into the final Act, then the position will become clearer. Controlling STL appears to be a major concern, and if letting regulations cannot be used, the planning system may be seen as the best tool to do so.

If in doubt, we would recommend landowners ‘air’ on the side of caution and speak to their local planning authority about their use or proposed use of a residential property for STL. If you would like to discuss the best way to approach an authority please get in touch with our planning team.