Development land

The Savills development land index shows particularly large increases in development land values across Scotland over the last year: 15.5% for Greenfield and 26% for Urban. Areas within Edinburgh and the surrounding areas, where there has been notable house price growth and significant undersupply, have witnessed the largest increases in values.

Central Edinburgh

Within central Edinburgh, the majority of opportunities comprise the redevelopment of former commercial sites or the renovation of existing properties.

Consequently, these are generally smaller in scale than family housing developments located on the outskirts of the city and usually require consideration of issues such as site remediation, neighbouring uses and listed building conservation.

Higher density sites and those with substantial infrastructure requirements are increasingly in demand, as developers seek to consolidate their land bank in established areas. Savills recently sold the 4-acre former Royal Mail depot on Brunswick Road to CALA Homes.

Suburban hotspots

Supply of suburban residential development land around Edinburgh’s periphery is currently constrained, given site availability and planning issues. As a result, land in appropriate postcodes with suitable planning prospects is highly sought after.

This trend is likely to continue alongside the preference for premium flats in well established neighbourhoods which attract downsizers. Commuter sites suitable for family housing are increasingly being progressed in the outer suburbs and across the Lothians, where larger acreages are available and increasingly viable.

For example, Savills recently sold a 23.4-acre site at Newcraighall to Barratt Homes after a marketing process which attracted a considerable level of interest.

Regeneration momentum

As large-scale regeneration sites in the north of Edinburgh begin to gain momentum, developers are likely to select the most attractive opportunities on a piecemeal basis until a critical mass has been achieved at these locations.

In the short term, new private housing within these areas will emerge close to established neighbourhoods where local amenities are available. Developers will remain hesitant about sites which do not meet these criteria.