In short: Three years on from full mandatory implementation, Scotland's short-term let licensing regime has delivered visibility and a defined regulatory footprint. It has delivered less on its most-cited justification - housing supply. This piece takes stock, honestly, of what the scheme did and did not do.
Scotland's short-term let licensing scheme became mandatory in October 2023. Three years is long enough to look at the scheme against the case that was made for it, rather than against the case made against it. This piece does that.
The stated objectives
The licensing scheme was sold on three principal grounds:
1. Guest safety and property standards. Short-term let accommodation would be required to meet defined safety standards (gas, electrical, fire), verified through a licensing process. 2. Neighbourhood amenity. Licensing would allow local authorities to attach conditions responsive to local concerns - noise, waste, key exchange. 3. Housing supply. Where short-term letting was thought to be reducing the supply of housing available for permanent occupation, licensing (and the Control Area tool that accompanied it) would allow local authorities to address the pressure.
What was actually delivered
On safety and standards, the scheme has delivered. The properties that hold licences now, on the whole, meet a defined and consistent safety standard. Whether that was worth the compliance burden imposed on the sector is a separate question, but on this narrow objective the scheme has largely done what it said it would.
On amenity, the scheme has delivered mixed results. Where individual local authorities have used licence conditions to address specific local issues, some improvement is visible. Where authorities have simply adopted standard condition packages without local calibration, the amenity benefit is harder to identify.
On housing supply, the scheme has not, on the available evidence, delivered. This is the most politically important of the three objectives and the one on which the scheme was principally justified. The evidence to date - most recently reflected in the Scottish Housing News £57m impact paper - is that the housing-supply benefit is at best marginal, and the economic cost to the tourism sector is significant. Properties that have exited short-term let use have, in many cases, not returned to long-term residential occupation; they have been sold, converted, or repurposed in ways that do not obviously add to the housing supply.
What the scheme cost
The costs have fallen in three places.
On operators. Application fees, compliance costs, and the time cost of the process itself have been material. Smaller operators, in particular, have absorbed a disproportionate share.
On the tourism economy. Fewer licensed properties in some areas, particularly Edinburgh, have translated into fewer beds available and, at the margin, into displaced or lost visitor spend. The Herald's 97% refusal analysis captured one dimension of this.
On local authorities themselves. Running a licensing scheme is expensive, and the fee income does not always cover the administrative cost. Several councils have been open about the resourcing pressure the scheme has placed on planning and licensing teams.
What operators should take from this
Three practical points.
First, the scheme is not going away. Nothing in the three-year record suggests that Scotland's licensing regime is likely to be materially rolled back. Operators should plan on the basis that the current regime is the baseline for the foreseeable future.
Second, the direction of travel is towards tighter, not looser, regulation. Housing pressure remains a live political issue and the Control Area tool continues to be tested by councils. Any operator not currently in a Control Area should not assume that will remain the case indefinitely.
Third, the operators who have fared best are those who took planning status seriously early. This is the recurring lesson from the three-year record. Operators with a Certificate of Lawfulness or planning permission have weathered the introduction of the scheme, the tightening of conditions on renewal, and the hardening of enforcement without significant disruption. Operators without either have had a materially harder time of it.
The pattern is now visible enough, and consistent enough, that operators in England, Wales, and Northern Ireland should treat the Scottish record as advance notice of what tends to happen when a registration or licensing regime meets a housing-supply narrative. The advice - address planning status early, before matters harden - is the same in every jurisdiction we work in.
Book a free consultation or start a Certificate of Lawfulness application.
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Ross Armstrong Head of Professional Services, STL Solutions
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