Scottish Housing Market Review Q2 2026

Key Points

The Scottish Housing Market Review collates a range of previously published statistics on the latest trends in the Scottish housing market.

Sales

• Registers of Scotland data shows that residential property sales in Scotland increased from 99,832 in 2024-25 to 104,339 in 2025-26 (4.5%). Within this increase, annual growth softened in the second half of 2025-26, falling from 6.1% in Q3 2025 to 3.3% in Q1 2026.

• More recent data relating to the number of residential Land and Buildings Transaction Tax (LBTT) returns indicates the slowdown in sales has continued, with returns down by an annual 2.1% in April and 3.9% in May. [Source: Revenue Scotland] Listings data also suggests that future sales growth will be weak, with listings in the City of Edinburgh down by an annual 8.9% in Q2 2026. [Source: Edinburgh Solicitors Property Centre]

House Prices

• Average house prices in Scotland, as measured by the UK House Price Index (HPI), increased annually by 3.3% in 2025-26. Annual house price growth slowed towards the end of 2025-26, from 3.9% in Q4 2025 to 2.0% in Q1 2026, the weakest growth since Q2 2024 (1.7%) and below the long-run average recorded since 2010 (2.7%). [Source: ONS]

Residential LBTT

• The provisional estimate for Residential LBTT revenue, excluding the Additional Dwelling Supplement (ADS), for 2025/26 was £744.8m. This was 13.7% above 2024-25 revenue, which is similar to the previous year’s increase of 13.1%. [Source: Revenue Scotland]

Private Rental Sector

• Citylets data shows the downward trend in new-let rent inflation in Scotland continued, entering negative territory in Q1 2026, at ‑0.4%, which is the first fall in this index since Q4 2017. After adjusting for inflation, rents fell by 3.4%, which is the third consecutive quarter of negative growth.

Mortgage Lending

• The number of mortgages advanced to first-time buyers in Scotland increased by an annual 6.0% in 2025-26, while for home movers the increase was 4.4%. [Source: UK Finance].

• Across the United Kingdom (UK), the number of mortgage approvals across April and May 2026 fell by an annual 3.4%. [Source: Bank of England]

• In Scotland, the mean Loan-to-Value (LTV) ratio for first-time buyers was 82.8% in Q1 2026, which was slightly down on the previous quarter (83.5%). Similarly, the mean ratio for home movers fell slightly over the quarter, from 71.0% to 70.7% in Q1 2026. [Source: UK Finance]

• The share of higher-risk regulated residential lending in the UK decreased over the quarter from 6.9% to 6.7% in Q1 2026. Despite this fall, other than Q4 2025, this is the highest level since 2008, prior to the financial crisis. [Source: Financial Conduct Authority]

• The total number of residential mortgage products in the UK increased by 384 over the month to stand at 7,132 in early June 2026, the highest since March 2026 (7,484). The number of buy-to-let (BTL) mortgage products rose from 4,144 in June 2025 to 5,194 in June 2026, an annual increase of 25.3%. [Source: Moneyfacts UK Mortgage Trends Treasury Report]

• The Bank of England’s Monetary Policy Committee has kept Bank Rate unchanged at 3.75% at its last four meetings and has warned that the energy and supply shock from the military conflict in the Middle East has created significant uncertainty and could increase CPI inflation later in 2026.

• Following successive reductions in average mortgage rates between August 2024 and January 2026, borrowing costs have recently begun to increase. Between January 2026 and May 2026, the average advertised two-year fixed rate for a 75% LTV mortgage has increased from 4.0% to 4.9%; for an LTV of 90%, the corresponding increase was 4.3% to 5.3%. [Source: Bank of England]

• The number of regulated mortgage loan accounts entering arrears fell by nearly a third from its post-Covid peak in Q3 2023 (15,715) to Q3 2025 (10,593) and has since then levelled off. [Source: FCA]

• For regulated mortgages, the downward trend in the number of mortgages entering arrears and the stock of mortgages in arrears has not yet translated into falling possessions, with the 1,214 new possessions in Q1 2026 representing an annual increase of 5.4%, although possessions remain below pre-Covid levels. [Source: FCA]

Housing Supply

• In the year ending March 2026, there were 17,268 new-build completions in Scotland, 1,914 fewer (-10%) than in the same period a year ago. In the year ending March 2026, the number of new-build starts was 14,955, an annual fall of 4.4%. [Scottish Government]

• The number of AHSP completions fell from 7,443 in the year ending March 2025 to 6,832 (-8%) in the year ending March 2026. In contrast, over this period, AHSP starts increased from 5,424 to 7,421 (37%), while approvals increased from 4,775 to 6,787 (42%). [Scottish Government]

Input and Output Prices for New Housing

• Annual growth in total pay in the construction sector in Great Britain (GB) slowed during early 2026, to stand at ‑1.0% in the 3 months to April 2026. [Source: ONS]

• The annual growth rate in the construction-output price index for new housing in GB remains relatively subdued, at 1.7% in March 2026. This compares with a post-Covid peak of 12.3% reached during 2022. [Source: ONS]

Data to: 30^th June 2026

Contact: Jake.Forsyth@gov.scot; Bruce.Teubes@gov.scot