The developer behind a significant city center development project in Scotland has announced a major change in plans, citing the impact of proposed housing legislation by the Scottish Government. Originally intended to include over 200 new homes, the project will now focus on constructing approximately 550 student flats at the cost of £250 million.
The decision to pivot towards student accommodation comes as a response to the “significant economic shift brought about by the new Scottish Housing Bill,” according to the developer. This move is part of a trend where housing developments are being redirected towards student housing following the introduction of emergency rent cap legislation in 2022. The legislation aimed to assist tenants during the cost of living crisis and laid the groundwork for permanent rent controls outlined in the new law.
Ediston Real Estate, in collaboration with Orion Capital Managers, is spearheading the New Town Quarter development in Edinburgh, which includes plans for a hotel and office space on the site of a former Royal Bank of Scotland office complex in the city’s New Town. Despite the shift towards student accommodation, the overall design of the project will be maintained, with 117 homes designated for private sale, 108 for mid-market rental housing, and the remaining 210 homes replaced by student flats.
Supporters of rent caps, such as Living Rent and architect Malcolm Fraser, argue that these measures are crucial in addressing Scotland’s housing emergency. However, the housebuilding industry has expressed concerns over the uncertainty surrounding rent caps and other aspects of the new legislation, which has led to more than £3.5 billion worth of housing investment being diverted away from the sector.
Ross McNulty, development director at Ediston Real Estate, emphasized the need for changes in response to the economic landscape shaped by the new housing bill. He reassured the local community that while the accommodation mix may shift, the quality and appearance of the development will remain consistent. A full consultation with residents and stakeholders will precede any new planning application submitted to the City of Edinburgh Council.
In light of these developments, industry leaders have called for a reassessment of certain provisions in the Housing (Scotland) Bill currently under review. Jane Wood, CEO of Homes for Scotland, stressed the importance of making home building a political priority regardless of the government in power, advocating for a more proactive approach to addressing the housing crisis.
Amidst these discussions, concerns have been raised regarding the shortage of student accommodation in Glasgow. Discrepancies in the estimated demand for student flats in the city have been highlighted, with reports suggesting a shortfall ranging from 6,093 to 22,000 beds. This underscores the need for clarity and accurate data to inform decisions in the current housing climate.
As the housing landscape in Scotland continues to evolve, developers, policymakers, and stakeholders must navigate a complex terrain shaped by legislative changes, economic forces, and shifting demand dynamics. The adaptation of projects like the New Town Quarter development reflects the challenges and opportunities present in the housing sector, emphasizing the importance of flexibility and responsiveness to meet the evolving needs of communities and residents.