UK: As the Scottish Parliament amends the Housing (Scotland) Bill to cover student housing, real estate investors and developers are warning of serious implications for future investment in Scotland’s cities.
The amendment to the Bill, passed earlier this month by the Local Government, Housing and Planning Committee, would bring both purpose-build student accommodations (PBSA) and university-owned halls under new rent regulation powers.
Cross-party MSPs supported the move, which aims to increase affordability in the student rental sector.
But the industry has expressed concern over the potential consequences. Among them is the property investment firm Firethorn, which has an active portfolio in Scottish PBSA, including its Leith Walk development in Edinburgh due to complete next year.
Marcus Weeks, director and head of Firethorn Living, in an interview with Scottish Housing News, said the amendment could threaten the viability of planned projects.
Weeks cited recent research from the Scottish Property Federation and Savills showing a 30 per cent year-on-year drop in Build to Rent (BTR) housing delivery in Scotland, attributing much of the decline to the chilling effect of rent controls. He warned that the PBSA sector may face similar setbacks.
He warned that a slowdown in development could reduce available housing, which may push up rents on existing properties, undermining the goal of making accommodation more affordable.
He also raised concerns over operational uncertainty for developments already underway.
The lack of clarity around the legislation could delay land sales and asset transactions, he added, at a time when developers and investors need confidence to proceed.
Despite concerns and while urging policymakers to engage with the sector during the next legislative phase, Firethorn has reaffirmed its long-term commitment to the Scottish market.
The Housing (Scotland) Bill will move to Stage 3 in the coming weeks. Developers are calling on MSPs to reconsider the amendment in order to avoid undermining efforts to tackle housing shortages and support economic growth.
Highlights:
• Firethorn warns Scottish rent control risks deterring PBSA investment in Edinburgh
• Amendment to Housing (Scotland) Bill could limit new student housing supply
• Developers urge clarity and collaboration as legislative uncertainty grows
