Why are so many short-term let licence applications being refused in Scotland, and what can landlords do next?

19 Feb 2026

By Katie MacLeod, Operations and Account Manager, Gilson Gray Property Services

Over the past two years, landlords across Scotland have faced a major shift in the regulatory landscape for short-term lets. Since the introduction of Scotland’s short-term let licensing scheme in October 2022, many property owners have found their applications delayed, restricted, or outright refused by their local authority.

For landlords who invested in holiday lets or Airbnb-style accommodation, this has been a frustrating and often costly experience. But while the short-term let market has become more complex, there is still a productive path forward.

With mortgages, insurance, and maintenance costs rising, a refused licence can leave landlords facing empty properties and ongoing financial commitments. Appealing a decision can be costly and time-consuming, with no guarantee of success.

Rather than staying in limbo, many landlords are now reassessing their strategy.

A practical alternative: long-term letting

Scotland continues to experience strong demand for long-term rental properties switching to long-term letting offers several advantages:

• Consistent Monthly Income – While short-term lets can generate higher peak-season returns, they are often seasonal and unpredictable. Long-term tenancies provide stable, reliable income.
• Lower Management Intensity – No constant guest changeovers, cleaning schedules, or booking platform management.
• Reduced Regulatory Uncertainty – Long-term lets operate under Scotland’s Private Residential Tenancy (PRT) framework, which is established and predictable compared to the evolving short-term regime.
• Strong Tenant Demand – With many former short-term properties leaving the holiday market, there remains substantial unmet demand for quality long-term rental homes.

Making the transition smoothly

If you’re considering pivoting to long-term letting, here are practical next steps Gilson Gray can help with:

• Review Furnishing – Decide whether to let furnished or unfurnished
• Check Compliance – Ensure EPC, electrical, gas safety, and registration requirements are up to date
• Assess Achievable Rent – The long-term rental market differs from short-stay nightly pricing
• Market Strategically – Professional photography and clear tenant targeting make a significant difference
• Consider Professional Management – Letting agents can handle tenant sourcing, referencing, and compliance

Being refused a short-term let licence can feel like a major blow, especially after significant investment. However, many landlords are discovering that long-term letting offers a more stable, lower-risk model in today’s regulatory environment.

Rather than fighting prolonged appeals or leaving a property vacant, repositioning your asset to meet Scotland’s pressing housing demand may ultimately prove to be the more resilient, and financially sustainable, choice.

For landlords willing to adapt, the market remains full of opportunity, just in a different form than before!