Scottish Housing Market Review Q1 2025

14th April 2025

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

Registers of Scotland data shows that due to three consecutive quarters of annual growth up to Q4 2024, sales in 2024 were up 5.4% from 2023. While 15.8% below the level of sales in 2021, the 98,674 sales in 2024 were 5.7% above the 2010-2024 average.

More recent Revenue Scotland data suggest that the growth in sales is continuing, with sales in the first two months of 2025 8.6% higher than the corresponding months of 2024.
House Prices

Average house prices in Scotland, per the ONS UK House Price Index, increased annually by 5.3% in Q4 2024, the fourth consecutive quarter of positive annual house price growth, and the highest growth rate since Q3 2022.
Private Rental Sector

Letting agent data indicates that there has been a significant decline in new-let rents: for example, the annual growth rate in the Citylets Rental Index has fallen from a peak of 13.7% in Q3 2023 to 6.2% in Q4 2024.
The temporary modification to the rent adjudication process, which came into effect on 1 April 2024, ended on 31 March 2025.

Mortgage Lending

The number of mortgages advanced to first-time buyers in Scotland rose by annual 16.1% in 2024, while for homes movers the increase was 13.7%. [UK Finance].
The mean LTV ratio for first-time buyers in Scotland was 82.7% in Q4 2024, not far off its recent peak of 83.4% in Q2 2022. In contrast, the mean ratio for home movers remains 3.4 percentage points below its recent peak of 72.7% in Q2 2022.

[UK Finance]
The total number of residential mortgage products in March 2025 was at its highest since February 2008, and the number of residential products with a maximum LTV of 95% was at its highest level since prior to the pandemic. Meanwhile, the number of buy-to-let (BTL) products is at its highest level in this data series.

Reflecting the cumulative 0.75% point cut to Bank Rate beginning in August 2024, the average interest rate for new floating-rate mortgage advances in February 2025 was 5.38%, 0.59% points lower than a year earlier, while for new fixed-rates mortgages the average rate was 4.47%, down 0.31% points. [Source: Bank of England]

The easing of interest rates has led to a small improvement in mortgage affordability after the previous significant deterioration: for first-time buyers in Scotland, the ratio of capital and interest payments to income has fallen from 20.5% in Q4 2023 to 19.7% in Q4 2024, although this remains well above 15.3% in Q2 2020. Meanwhile, there was a smaller fall for home movers, from 18.9% in Q3 2023 to 18.6% in Q4 2024, compared to 15.7% in Q3 2020. [UK Finance]

Despite a small uptick in Q4 2024, the 11,824 regulated mortgage accounts entering arrears across the UK was significantly below the post-Covid peak of 15,706 in Q3 2023. [FCA]. BTL mortgages in arrears of 1.5% or more of the outstanding balance across the UK recorded its fourth consecutive quarter-on-quarter fall in Q4 2024, and is now 12% below its level in Q4 2023. [UK Finance]

There are signs that the recent stabilisation in arrears is feeding into possessions: the quarterly increase in new possessions of regulated mortgages was only 3% in Q4 2024, down from 23% in Q1 2024, while for non-regulated mortgages there was a quarterly decrease of 4%. [FCA]. New BTL possessions in Q4 2024 were at a similar level to the previous two quarters. [UK Finance]
Homelessness

The number of households in temporary accommodation stood at 16,634 at the end of Q3 2024, and there were 10,360 children in temporary accommodation; both are at their highest level since comparable records began. [Scottish Government]
Housing Supply

In 2024, there were 19,797 all-sector new-build completions in Scotland, a 7% fall on 2023; meanwhile, there were 15,050 starts, down by 9%. [Scottish Government]

In 2024, while there was a decrease in AHSP completions, which fell by 18% from 2023 to stand at 8,180, there were increases in approvals (up 4% to 6,440) and starts (up 4% to 6,501). [Scottish Government]

Output and Input Prices for New Housing

Construction output-price inflation has edged up from 2.0% in March 2024 to 4.0% in December 2024. While construction material-price inflation remains subdued (up by an annual 1.0% in January 2025), there has been an increase in earnings, with annual growth in total pay in the construction sector rising from 1.9% in the three months to May 2024 to 5.9% in the three months to January 2025. [UK Government & ONS]
Data to: 4th April 2025

Source
https://www.gov.scot/publications/scottish-housing-market-review-q1-2025/