Scotland’s student accommodation market is caught in a policy tug-of-war just as the demand for housing hits boiling point. A surprise parliamentary twist has sent developers and universities scrambling, as new rent controls threaten the future of purpose-built student housing across the country.
Growing Demand, Shrinking Options
The housing crunch facing students isn’t new, but it’s becoming more brutal by the year. In cities like Edinburgh, Glasgow and Aberdeen, university students are being pushed to the edges—sometimes literally.
Competition for flats near campuses is fierce. Students often find themselves settling for rentals miles away from lecture halls, or paying premium prices for even the most basic rooms.
This isn’t just anecdotal. Scotland declared a full-blown housing emergency in 2024. And student digs are smack in the middle of the crisis.
Purpose-Built Student Housing: More Needed, Less Certain
With traditional lets failing to meet growing student numbers, Purpose-Built Student Accommodation (PBSA) has emerged as the logical solution. It’s neat, efficient, and ticks all the boxes—especially for international students and postgrads who want low-fuss living.
Investment outlooks back this up. CBRE’s UK Real Estate Market Outlook for 2025 points to “strong demand” for PBSA. Projects like Fusion Student’s New Town Quarter in Edinburgh and Valeo’s Carrick Street in Glasgow are seen as flagship examples.
But…
There’s a giant question mark over the sector’s future in Scotland. And it’s being drawn by the Scottish Parliament.
A Controversial Move in the Housing Bill
So here’s where it gets sticky. The Housing (Scotland) Bill was moving through Parliament, largely seen as a move to introduce rent controls in certain zones. PBSA wasn’t part of the original draft. That changed—unexpectedly—on 6 May 2025.
MSP Graham Simpson from the Scottish Conservatives tabled an amendment to include student residential tenancies under rent control rules. It passed by just one vote.
The kicker? His own party has publicly opposed rent controls for years.
Reactions? Utter disbelief.
Developers were blindsided. Universities were confused. Even the Scottish Government was quick to distance itself from the amendment, saying it doesn’t support including PBSA under rent control zones.
One sentence from a housing sector exec pretty much summed it up: “It makes no sense.”
What Happens if the Amendment Stays?
The private sector is worried, and not quietly.
Let’s break down what the PBSA sector could face if this sticks:
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Rental caps tied to CPI +1%, maxing out at 6% increases
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Uncertainty for investors already nervous about Scotland’s shifting housing policy
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Possible delays or cancellation of upcoming PBSA projects
This hits hard, especially since many PBSA providers operate on tight margins and long-term planning.
Table: Projected Impact on PBSA Sector if Rent Controls Apply
| Factor | Without Rent Controls | With Rent Controls |
|---|---|---|
| Investment Confidence | High | Low |
| Planned Developments | On Track | At Risk |
| Student Housing Availability | Increasing | Slowing |
| Rental Prices for Students | Market-led | Possibly Lower |
Even students have mixed feelings. Some welcome price restrictions. Others worry that fewer PBSA options could push them into worse housing elsewhere.
A Window to Reverse Course?
There’s still hope for a U-turn.
Stage 3 of the Bill—the final stage—will see MSPs vote again in October 2025. Word on the street is that the government will seek to remove the PBSA amendment.
That’s not just wishful thinking. Government insiders and opposition members alike have said the support just isn’t there to keep PBSA under rent caps.
One sentence. One paragraph. That’s all it might take to fix this.
Still, nobody’s popping champagne yet.
The Somerville Letter: 28-Day Notices and Consultation Promises
In another twist, Cabinet Secretary Shirley-Anne Somerville published a letter on 10 May laying out the government’s stance.
She confirmed two big things:
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They’ll introduce powers for 28-day notice periods for student tenancies—in specific situations.
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They’ll consult PBSA providers and student reps before finalising anything.
This was a move to calm the waters. Especially for developers.
The letter also made clear the government’s intention to remove PBSA from rent control measures altogether. If they follow through, it could restore investor confidence—something badly shaken by May’s amendment drama.
Looking Ahead: Will the Market Catch a Break?
No one’s saying PBSA is the only answer. But in a housing market as stressed as Scotland’s, it’s a vital part of the puzzle.
The hope is that the government, opposition, and stakeholders can hammer out something that works. Something that keeps rent fair and keeps investment flowing.
For now, everyone—from landlords to first-year students—will be watching Holyrood closely this autumn.
