EDITORIAL: Warnings on short lets legislation 

Skye has many self-catering and B&B businesses – but the island also has housing pressures

The deadline to comply with what has been one of the most talked about pieces of legislation ever to affect the Highlands passed last weekend.

By Sunday 1st October operators of short-term-lets – bed and breakfasts, self-catering houses, pods, chalets and caravans – must have applied for a new licence if they wish to continue trading.

A fine of £2,500 could be the sanction for those who open their doors without permission.

The new rules have been years in the making – sparked by genuine concerns about an explosion in the self-catering sector and its impact on housing markets in tourist hotspots like central Edinburgh and the West Highlands.

In spite of the good intentions, warnings have followed the legislation every step of the way. 

There is little doubt that the housing – and croft land – market has boomed in recent years because of its development potential.

Even modest properties can fetch £4000 a week in the right locations, so for some the short let sector is big business.

This can be damaging for communities, because without people and houses, local firms and the providers of key services like hospitals and schools face huge barriers to recruitment.

The major question mark over these licence requirements, however, is not in how their impact will be felt by those with the deepest pockets – who might even welcome the prospect of their investment gaining them greater exclusivity.

Rather it is the smaller operators who form the backbone of the accommodation sector who seem most at risk.

The phrase ‘a sledgehammer to crack a nut’ has been uttered plenty and it’s easy to see why when B&B owners, who have been welcoming visitors to their homes for decades, say they are considering shutting down.

The lets licence differs from council to council and while in Highland the fees are initially between £320 and £610, the cost of compliance could be considerably more should property alterations be required to meet them.

There is also an expectation that the prices will rise as cash-strapped local authorities seek to boost their income streams in the coming years.

Supporters of the licensing scheme have accused the tourism lobby of scaremongering in an effort to protect well-off property owners at the expense of those in need of an affordable home.

Claims that licences would trigger a ‘Highland clearance’ are silly, yet there is evidence the new rules could damage an industry worth over £200 million a year to the Skye economy alone. 

Trade body The Scottish Bed and Breakfast Association said almost two-thirds of B&B owners were considering closing due to the impending legislation.

Last month the Highlands and Islands Federation of Small Business said that some 75 per cent of the region’s operators had still to apply for a licence.

Since then many of them will have swallowed hard and returned their forms, but if even if a third did not the effects for the wider economy – the shops, cafés, visitor attractions and restaurants – could be stark if potential customers have nowhere to stay.

Perhaps the impact of the legislation will indeed be to correct the housing market in favour of those who can’t currently access it – but if that is the legislation’s purpose, why apply it to accommodation which wouldn’t and couldn’t ever be part of the general housing stock?

A better approach would be to build more homes, make more land available to build them on, and to encourage the economic growth in rural areas that would support jobs.

Instead, by choosing to exert bureaucratic and financial pressure on existing small businesses – many of which have been set up by people keen to ease housing costs and supplement modest rural salaries – they may well have threatened the area’s biggest industry. 

And the biggest winners in the property market could yet turn out to be those on the hunt for second homes which will lie empty for most of the year.

Editorial from the WHFP 29.9.23