Land Use + Diversification

Question 1

Tell me about holiday lets? What do I require for this?

Answer 1

In Scotland you require a Short Term Let License from your local council

The property must meet specific requirements for this license to be granted

Question 2

What are the specific requirements a property would need to meet the STLL rules?

Answer 2

Property must meet the Repairing Standards
Valid EPC
Heat, Smoke and Co2 detectors
Records showing furnishings meet the Furniture and Furnishings (Fire Safety) Regulations 1988
Gas Safety Certificate (where applicable)
EICR
PAT
Legionella RA
Public Liability Insurance
Building Insurance
Fire Risk Assessment
Floor Plan (to scale) showing fire escape routes, room sizes etc

Question 3

When did the Short Term Let Licenses come into effect in Scotland?

Answer 3

Hosts were to apply before 1st October 2023

Question 4

Do you require planning permission for Short Term Let Licensed properties?

Answer 4

Only within the City of Edinburgh Council region and Badenoch and Strathspey in Highland Council

Question 5

What is the minimum a property can be let out to be classed as a short term let?

Answer 5

available to let for 140 nights or more a year
actually let for 70 nights or more in a financial year

Question 6

Can I still let my existing holiday let whilst I wait for my license to be processed?

Answer 6

Only if the property was being used as a holiday let prior to 1st October 2022

Question 7

What sort of holiday accommodation may not require an STLL?

Answer 7

Caravan / glamping pod site with a caravan site license
Hotels, B&B or guest house with a premises licenced under Licensing (Scotland) Act 2005
Self-catering accommodation within the grounds of a licenced premises or hotel (Licensing (Scotland) Act 2005).

Question 8

What information must you display in a short term let?

Answer 8

• certified copy of the licence and licence conditions
• fire, gas and electrical safety information
• details on how to contact emergency services
• copy of gas safety report
• copy of the Electrical Installation Condition Report
• copy of the Portable Appliance Testing Report
• instructions on what to do if the carbon monoxide alarms sounds
• safety instructions for operating and moving any mobile gas cabinet heaters provided

Question 9

How long will a STLL last?

Answer 9

Up to 3 years (discretionary between councils)

Question 10

What are the tax implications of holiday lets?

Answer 10

Liable for Non-Domestic rates instead of council tax

STLL classed as trading income rather than investment income therefore they are eligible for BPR

Question 11

What price would you expect per acre for solar?

Answer 11

In my experience, £900 to £1000

Question 12

What price per mW would you expect for BESS?

Answer 12

In my experience, £2000/mW dependent on distance from grid

Question 13

What sort of properties require a short-term let license?

Answer 13

Any property used for short term letting, this can include holiday lets and also short term stays in care homes that do not fall under the social care eligibility

Question 14

What would you include in a Fire Risk Safety Assessment?

Answer 14

I instructed a contractor with the relevant qualifications and expertise to carry out the assessment.

They advised the property must have the adequate supply of smoke alarms, heat detectors and CO2 alarms. One smoke alarm must be on each floor and in common spaces, there must be heat detectors in the kitchen and CO2 alarms in all rooms with heating appliances and flues.

All soft furnishings must have fire resistant labels indicating that they were made from and filled with fire resistant materials.

Question 15

Has there been any updates to STLL legislation in Scotland?

Answer 15

As of 30th Aug:

1. Ability to transfer an existing licence to a new owner, e.g. on sale of property.
2. Ability to apply for a provisional licence whilst a property is being constructed/developed, to be finalised on completion.

Question 16

How did you calculate the rent of the dog park?

Answer 16

Already had 3 dog parks with the same tenant across the estate so considered these rents as well as comps on the neighbouring estate

£5k per annum plus turnover rent of 5% of everything he made over £20k

Question 17

What advice did you provide your client with in terms of STLL v PRT for the properties in West Lothian?

Answer 17

I advised my client that the STLL would require a larger investment but based on comparables I had for the area I advised this would provide a bigger return.

I also advised for STLL’s currently there is no requirement to meet a minimum EPC level so that can reduce renovation costs however we do expect this to change long term so not to bank on that

Question 18

What are the key differences between an STLL property and a PRT property?

Answer 18

STLL property must meet stricter guidelines and is only for short term lets whereas PRT’s are for long term lets and have a no fault eviction policy

STLL’s are furnished so require a more through fire safety risk assessment and PAT testing whereas PRT’s generally would not as not normally furnished

Question 19

Did you require planning permission for the dog park?

Answer 19

Yes for change of use and a new access however I included a clause in the lease

Question 20

What were some of the headings in the lease for the dog park?

Answer 20

Tenant
Landlord
Property
Rent
Rent Review
Access
H&S
Insurance
Termination
Break Clause
Planning Permission

Question 21

How did you select a new site for the dog park? How did you advise your client on this?

Answer 21

Discussed with the Estate’s in house land manager and reviewed which fields were available.

Most of the land in arable but some grazings and land manager keen to change from grazings to anything else

Looked at which sites were in close proximity to urban settlements and far enough away from the other two sites the tenant had on the estate.

Looked at access, field condition and drainage, ability to get water to the site, space for a car park and two dog fields.

Question 22

What had to happen on the BESS project for the Option to trigger into a Lease?

Answer 22

Developer had to obtain planning and grid connection

Question 23

What do you understand in relation to planning and diversification on farms?

Answer 23

Under class 18 of permitted development rights in Scotland
- Ag buildings in Scotland can be 1000sqm and 12m high without full pp
- ag buildings built before Nov 2019 can be altered to become dwellings
- ag buildings built before Nov 2019 can be used for commercial use

Question 24

Tell me what you would advise your client in relation to securing the castle and what implications this may have?

Answer 24

The castle is generally stable therefore did not require to be cordoned off completely however it did need to be secured.

I advised my client we needed to install proper doors with sturdy locks, however this had to be carried out by a bespoke joiner to ensure the doors fitted in with the historic nature of the building, making it a costly exercise.

Question 25

Can you talk me through the timeline of a field being used for housing development?

Answer 25

1. Under new NPF4 rules field must be allocated for housing by the local planning authority
2. Promote field to developers
3. Enter option agreement, GI’s etc carried out
4. Planning is obtained and option triggers into sale of field
5. Construction commences

Question 26

Talk me through the financial advice you provided to your client in terms of PRT v STLL in West Lothian

Answer 26

PRT
£1500pcm x 12 = £18kpa
£900/annum running costs
£40k per property renovation

44% RoI

STLL
£1500pw x 52 x 65% = £50,700pa
£6,000/annum running costs
£55k renovation

83% RoI

STLL has higher running costs and initial renovation/furnishing costs however should generate a higher return on investment.

Question 27

What is the cost of a STLL for secondary letting in your area?

Answer 27

Edinburgh = £653 for 1-3 people

West Lothian = £550 for 2 to 3 bed

Harris = £375

Question 28

What is the fine for not having a STLL?

Answer 28

1 year ban and £2500

Question 29

Are there any reliefs your client could claim for the STLL’s in terms of rates?

Answer 29

Yes as a small business, if the combined value of the rateable properties is less than £12k they can claim 100% or relief or if the combined value is between £12 and £15k then they can claim 25% relief on each property