Housing and Short-Term Lets in Scotland: The Facts

Short-term lets are often presented as being a leading cause of Scotland’s housing crisis. However, it is important to place the debate in a holistic context – for instance, noting the number of empty homes in Scotland, demographic changes, and the need to build more homes – while recognising the value of tourist accommodation to the Scottish economy and local communities.

The ASSC welcomes the opportunity to share data about the holiday let sector which we believe will contribute to a more informed conversation about the appropriate regulatory framework.

Self-Catering in Scotland

• Self-catering properties have been a longstanding presence in communities for generations, especially in rural/remote communities, and provide an economic boost for local areas and enhance Scotland’s tourist accommodation offering.
• Latest figures show there are 17,794 self-catering units on Non-Domestic Rates. These properties generate: 4 million visitor nights per year; £867.1m total visitor spend; and support 23,979 FTE jobs.[1]
• Such self-catering properties are legitimate, bona fide businesses whose owners depend on the money generated for their livelihood – it is not a hobby or a way to supplement their income. This is entirely separate from the ‘homesharing’ concept, or those amateur operators who utilise online marketing platforms but are not subject to the same levels of existing regulation.

The Need for Robust Empirical Data

• Underpinning any decision to regulate the short-term letting sector is the need for robust, empirical data. Unfortunately, there has been a tendency to focus on scraped data from Airbnb – based on inaccurate information and flawed methodologies – leading to misleading conclusions about the nature of the short-term letting landscape.[2]
• The ASSC is not averse to regulation and has proactively shared evidence-based policy papers and recommendations[3] since 2017 about the nature and scale of short-term letting in Scotland but unfortunately this has been ignored by a focus on this unreliable data from one marketing platform.
• The Scottish Government’s draft BRIA for short-term let licensing references research noting that there were approximately 32,000 active listings on Airbnb in May 2019.[4] However, this does not mean that there are 32,000 short-term lets which would be readily available on the long-term housing market as many have erroneously claimed.
• The number of listings on online platforms in any given area is not necessarily an indication of impact on long-term housing. For example: (a) many of these properties are already the primary residences of individuals involved in ‘homesharing’ who share a room(s), or their entire home while away; (b) each listing does not represent a single housing unit. A property can have multiple listings; and (c) marketing platforms like Airbnb contain a diverse range of accommodation including hotels and B&Bs, as well as unconventional accommodation like yurts, barns, boats, and campervans and one train, which cannot be seen as housing stock.
• Parliamentary answers from the Scottish Government[5] confirm the BRIA figures were from scraped data provided by InsideAirbnb (not from Airbnb directly) and that they could not break this down by property type – be it a single/shared room, entire property, or unconventional accommodation. This means the estimation there are 32,000 “short-term lets” is wholly unreliable. It is also based on pre-pandemic 2019 figures. Moreover, they admit “we do not have an estimate of how many short-term lets will return to the long-term housing market.”[6]11

A Holistic Discussion on Housing

The housing challenges facing Scotland are far more multifaceted than the existence and growth of short-term and holiday lets alone. For instance:

• There are currently 47,333 empty houses in Scotland (of which 7152 are in Edinburgh, 3536 in Glasgow, 2943 in Fife, 2595 Highland).[7] These empty homes could be utilised for far more productive purposes and provide homes for those who need.
• The number of households in Scotland continued to increase in 2020, reaching 2.51 million. This was an increase of 142,800 (6%) since 2010. The growth in the number of households is partly due to an increase in the population, but also because people are increasingly living alone or with fewer other people. More than a third of households are single person households. An estimated 900,000 people are living alone.
• There were 2.65 million dwellings in Scotland in 2020. Of these, 90,500 dwellings (3%) were vacant and 24,500 (1%) were second homes.[8]
• Empty and second homes are concentrated in different parts of the country. For example, remote rural areas have a higher percentage of empty and second homes than urban areas[9]. However, City of Edinburgh is a hotspot for empty homes in Scotland.
• 172,170 houses were built between 2010-2019 (18,118 in Edinburgh)[10] – and we need many more. Homes for Scotland have argued that Scotland has amassed a housing shortfall of 85,000 homes and that we need to build at least 25,000 per year to meet the demands of our population.[11]
• Progress on housebuilding is not fast enough. For instance, the Scottish Government have only spent half of their £25m Rural Housing Fund which aims to build affordable homes in rural areas.[12]
• City of Edinburgh had the largest increase in absolute number of households (17,300), an increase of 8%.[13]
• Over the last ten years, the proportion of dwellings which are second homes has increased in five council areas and decreased in 24 council areas.[14]
• When housing demand and the level of empty housing is set against the number of self-catering units, it suggests self-catering activity is not of a scale sufficient to affect housing supply issues in Scotland. Ultimately, building too few homes remains the core cause of Scotland’s housing problems, not the holiday let sector.

Conclusion

• Policymakers should not use holiday accommodation as a means to solve housing challenges in Scotland, instead focusing on building more affordable homes and tackling the scourge of empty properties.
• Any short-term let regulations taken forward, either at a national or local level, need to be informed by robust empirical data. Scraped data from online platforms can lead to misleading conclusions about the nature of the short-term letting market.
• The Scottish Government’s BRIA accompanying their licensing proposals states: “A benefit of licensing will be improved access to affordable rented homes.” This claim is entirely unfounded and lacks an evidence base.
• Any housing issues in relation to short-term lets should be addressed by the Planning Act 2019 – through the introduction of control zones underpinned by robust quantitative data – and should not play a part in the licensing proposals which are meant to focus on health and safety.
• Small businesses like self-catering, present in communities for decades, should not be used as a convenient scapegoat for wider failures in housing policy.
• The Scottish Government needs to back legitimate professional businesses and our renowned tourism sector as we recover from the effects of Covid-19, allowing visitors at home and abroad to benefit from our unique hospitality and fantastic range of accommodation.

Footnotes

[1] https://www.assc.co.uk/wp-content/uploads/2021/08/Economic-Impact-Study-%E2%80%93Scotland-Report.pdf

[2] This is evident in both the Scottish Government’s BRIA accompanying their licensing proposals, as well as City of Edinburgh Council’s plans for a short-term let control area.

[3] For instance, see ASSC, Far More Than Just Houses: The Benefits of Short-Term Rental in Scotland (2018). Url: https://www.assc.co.uk/wp-content/uploads/2018/06/MoreThanJustHouses.pdf; and ASSC, Forward Together: A Collaborative Approach to Short-Term Letting (2020). Url: https://www.assc.co.uk/wp-content/uploads/2020/12/2020_ForwardTogether.pdf

[4] https://www.gov.scot/binaries/content/documents/govscot/publications/impact-assessment/2021/06/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria/documents/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation/govscot%3Adocument/short-term-lets-licensing-scheme-planning-control-area-legislation-draft-business-regulatory-impact-assessment-bria-consultation.pdf

[5] Parliamentary answer to S6W-02111. Url: https://www.parliament.scot/chamber-and-committees/written-questions-and-answers/question?ref=S6W-02111

[6] Parliamentary answer to S6W-02109. Url: https://www.parliament.scot/chamber-and-committees/written-questions-and-answers/question?ref=S6W-02109

[7] https://goodmove.co.uk/empty-housing-hotspots/

[8] Vacant properties include those classified as:  long-term (six months or more) empty (47,300, 1.8% of all dwellings); unoccupied exemptions (43,200, 1.6% of all dwellings) such as new homes yet to be occupied and dwellings undergoing repair or awaiting demolition. See: https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf

[9] https://www.nrscotland.gov.uk/statistics-and-data/statistics/statistics-by-theme/households/household-estimates/2020

[10] https://www.gov.scot/publications/housing-statistics-for-scotland-new-house-building/

[11] https://yourviews.parliament.scot/session-5/local-gov-sustainability-covid/consultation/download_public_attachment?sqId=question-2020-06-10-3171498657-publishablefilesubquestion&uuId=866941340

[12] https://www.thecourier.co.uk/fp/politics/scottish-politics/2493715/snp-ministers-under-fire-over-failure-to-spend-25-million-rural-housing-fund/

[13] https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf

[14] https://www.nrscotland.gov.uk/files//statistics/household-estimates/2020/house-est-20-publication.pdf