Construct-to-rent specialist Get Residing is pausing work on a £200m growth in Glasgow metropolis centre over considerations the venture is not financially viable.
The event would have seen the creation of 1,500 houses on the location of the previous School Road Items Yard on town’s historic Excessive Road, with just below half meant as scholar properties.
However Get Residing mentioned the Scottish Authorities’s lease management coverage – underneath which lease will increase are quickly banned throughout tenancies in response to the cost-of-living disaster – mixed with market situations imply the way forward for the scheme is now unsure.
“At Get Residing, we’re huge advocates of Glasgow as a thriving business hub and we all know that the high-quality rental houses which are essential to driving wider development and productiveness within the area are in nice demand,” a spokesperson mentioned.
“That is what led us to our plans to create 1,500 houses on the previous School Road Items Yard website, of which 823 houses can be for lease, alongside 687 studios for college kids.
“Nevertheless, the continuing coverage on lease controls in Scotland mixed with present market challenges has resulted in a shift in investor help, which means that the viability of this growth is now unsure.
“Whereas it stays our ambition to be a part of the answer to town’s housing scarcity, at current we’re unable to proceed with the scheme towards this background and we hope that the Scottish Authorities will rethink its stance.”
Though lease controls appear to be a pretty prescription for limiting rental ranges, they’ve unintended penalties that exacerbate the underlying housing issues, the spokesperson added.
“By lowering funding within the rental market, such insurance policies suffocate future provide, decrease requirements and threat creating an unregulated secondary marketplace for sub-lets,” she mentioned.
However the Scottish Authorities defended its lease cap, saying ministers had been dedicated to making sure the measure remained “proportionate and crucial”.
“We’re within the midst of a cost-of-living disaster, and our emergency laws has been defending tenants from important lease rises and threat of eviction,” a spokesperson mentioned.
Preliminary rents for newly constructed rented houses are set by the market and so weren’t affected by the cap, they added. Safeguards had been inbuilt for landlords, with “modest” lease rises allowed from April onwards.
“We’re additionally suspending the lease cap for scholar lodging from 30 March, recognising its restricted influence on annual rents set on the idea of an educational yr,” he mentioned.
Final month, main Scottish homebuilder Springfield introduced a dip in revenue and mentioned it could stop taking on long-term affordable housing contracts till market situations improved.
The corporate additionally withdrew plans to broaden its exercise within the non-public rented sector following the federal government’s intervention in lease management.
Get Residing’s £2bn portfolio consists of 3,000 houses for lease throughout three neighbourhoods – East Village and Elephant Central in London, and New Maker Yards at Middlewood Locks, Manchester.
