The developer of "one of the largest city centre developments for a generation" has cited Scottish Government housing law proposals for abandoning plans for over 200 new homes.
The Herald can reveal the large-scale real estate company has lodged plans that would instead lead to around 550 student flats at the £250 million development.
The developer said it is "having to make changes as a result of the significant economic shift brought about by the new Scottish Housing Bill".
It is the latest in a string of new housing developments that have been axed in favour of student flats since the introduction of emergency rent cap legislation in 2022, partly to help tenants during the cost of living crisis, and subsequent plans for permanent rent controls, set out in the new law.
Ediston Real Estate is leading work on the New Town Quarter development in Edinburgh on behalf of Orion Capital Managers.
The project is also bringing a new hotel and office space on the landmark site of a former Royal Bank of Scotland office complex in the city’s New Town.
However, a new planning application seeks to change the nature of the accommodation, while maintaining the overall design.
It will retain 117 homes private for sale, and 108 mid-market rental housing, and the student accommodation will take the place of 210 built-to-rent homes.
Proponents of rent caps including Living Rent, the tenants’ union, and leading architect Malcolm Fraser have said such controls can be an important part of tackling Scotland’s housing emergency.
The housebuilding industry said more than £3.5 billion worth of housing investment has gone south because of uncertainty around rent caps and other aspects of the new law.
Ross McNulty, development director at Ediston Real Estate, told The Herald: "We've been informing the local community that, in common with many other developers in Edinburgh, we are having to make changes to our proposals as a result of the significant economic shift brought about by the new Scottish Housing Bill.
"Although the appearance and quality of the design will not change, we are bringing forward proposals to introduce Student Housing.
"This will enable us to ensure that the overall development and indeed the public realm improvements can be delivered in line with the original vision. There will be a full consultation with local residents and stakeholders before any new planning application is submitted to the City of Edinburgh Council."
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The news comes as industry figures again called for a rethink on aspects of the Housing (Scotland) Bill currently under consultation.
Jane Wood, chief executive of Homes for Scotland, which represents around 200 companies that "together provide the vast majority of all new homes built across the country", said: "Whatever government we see coming to the fore in 2026, home building must be a political priority that is led from the highest level. The time for shifting the deck chairs and tinkering round the edges of the housing emergency is over."
Also this week, some conflicting information around the numbers of student flats needed in Glasgow was highlighted by Herald columnist and editor of The Glasgow Wrap Marissa MacWhirter. Marissa wrote that the shortfall of student beds in Scotland’s largest city is 6,093, according to a new report from the University of Glasgow-led UK Collaborative Centre for Housing Evidence, as opposed to 22,000 included in a Savills report from April.
The report highlights significant shortfalls in student accommodation but also perhaps the need for greater clarity around demand given the current climate.
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