Construction inflation a ‘challenge’ as next Staneyhill contract goes out to tender
HJALTLAND Housing Association says construction inflation remains a “challenge” as it goes out to tender for more homes at Staneyhill in Lerwick.
The Hjaltland Housing Association contract is for a further six two-storey homes at the Staneyhill Terrace, with an estimated value of £2.2 million excluding VAT.
The contract also includes external works such as paving, fencing, lock block surfacing and landscaping.
Chief executive Bryan Leask said the anticipated cost for this phase reflects “current market conditions, the location, and the specification required for modern, energy‑efficient homes”.
“While higher costs are never ideal, they haven’t changed the overall direction of the project,” he said.
“We’ve planned for these pressures and continue to work closely with the Scottish Government to ensure the long‑term delivery of the site.”
Local firm DITT was awarded the contract for a first phase of housing on the project earlier this year, totalling 32 homes.
Following significant preparatory infrastructure works, DITT is now on site behind the Anderson High School halls of residence.
The Staneyhill project is being built in phases, with the goal of eventually providing around 300 new homes.
DITT’s phase one contract, for 32 one-bed homes, is expected to see construction run through to 2028.
That contract has a total works cost of £9.7 million and is being supported by the Scottish Government, Shetland Islands Council and the Bank of Scotland.
Leask said the overall Staneyhill project is “progressing well”.
“With the infrastructure contract now nearing completion and construction underway on the first homes at North Loch Drive, we’re moving into the next planned phase of development, phase 2A,” he said.
“Over the past year we’ve worked closely with the local construction sector through the Future Housing events, alongside the SIC.
“One of the clear messages from contractors was a desire for smaller, more accessible packages of work.
“We’ve taken that on board, and this phase is deliberately sized to allow smaller firms to bid. These six homes form the second of three phases planned for the terrace area.”
Leask said a further contract for the remaining 28 homes will follow in due course, bringing the total number of new homes in this part of the site to 66.
In terms of design, the homes in the second phase are “slightly larger than those in the first phase, reflecting the mix set out in the Staneyhill masterplan”.
“Once the infrastructure works conclude early next year, the wider Staneyhill development will support the construction of around 300 new homes over the next 10 to 15 years, in line with the masterplan approved in 2018 following extensive public and stakeholder consultation,” Leask added.
Become a member of Shetland News
Shetland News is asking its readers to consider paying for membership to get additional perks:
- Removal of third-party ads;
- Bookmark posts to read later;
- Exclusive curated weekly newsletter;
- Hide membership messages;
- Comments open for discussion.
If you appreciate what we do and feel strongly about impartial local journalism, then please become a member of Shetland News by either making a single payment, or setting up a monthly, quarterly or yearly subscription.
Already a member? Sign in to hide this message.
