Scottish Housing Market Review Q3 2025

25th October 2025

Quarterly bulletin collating a range of previously published statistics on the latest trends in the Scottish housing market.

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

Sales
Annual growth in sales in the first half of 2025 was 6.0%, which while somewhat below the 9.5% recorded in the second half of 2024, remained significant. This also brought the level of sales nearly in line with the pre-covid period (down only 0.7% on the level recorded in the first half of 2019).

Revenue Scotland data shows strong sales growth has persisted in recent months. The annual growth in residential LBTT returns for the period May to August 2025 was 4.1%, only slightly below the growth of 4.6% in the period January to April 2025.

Average house prices in Scotland, as measured by the UK House Price Index (HPI), increased annually by 4.4% in Q2 2025. This is the highest growth rate since Q4 2022 and the sixth consecutive quarter where annual house price growth has been positive.

The provisional estimate for Residential LBTT revenue - excluding the Additional Dwelling Supplement (ADS) - for the period between April and August 2025 was £223.6m. This represents a 4.7% increase compared to the same period in 2024, and a 19.4% increase on 2023.

The latest data from letting agents indicate that the downward trend in new-let private rental growth has continued: for example, the annual growth rate in the Citylets Rental Index has fallen from a peak of 13.7% in Q3 2023 to 3.6% in Q2 2025.

The number of mortgages advanced to first-time buyers in Scotland increased annually by 8.8% in Q2 2025, while for home movers the increase was 6.0%.

The mean Loan-to-Value (LTV) ratio for first-time buyers in Scotland was 83.4% in Q2 2025. This is the highest mean LTV ratio in the series, which began in Q2 2005. Meanwhile the mean ratio for home movers increased over the quarter from 69.6% to 70.7% in Q2 2025, which is below its post-pandemic peak of 72.7%.

The total number of residential mortgage products increased by 220 over the month to stand at 7,062 in early September 2025, which is the highest recorded in the time series which began in 2008. Similarly, the number of buy-to-let (BTL) products also reached a new peak (4,597) in September 2025.

Reflecting successive cuts in Bank Rate since August 2024, over the year to August 2025, the average interest rate for new floating-rate mortgage advances fell by 1.0% point to 4.80%, while for new fixed-rate mortgages the effective rate fell by 0.5% points to 4.22%. Despite this fall, average interest rates are still significantly above the rates in December 2021 when the most recent tightening cycle began. Furthermore, the average rate on outstanding fixed-rate mortgages continues to trend up (by 0.36% points over the year to August to reach 3.71%). as mortgages reaching their end of term are refinanced at higher rates.

The 10,673 regulated mortgage accounts entering arrears across the UK was significantly below the post-Covid peak of 15,706 in Q3 2023. [FCA]. The number of BTL mortgages in arrears of 1.5% or more of the outstanding balance across the UK recorded its sixth consecutive quarter-on-quarter fall in Q2 2025.

The improving trend in arrears has not yet translated into falling possessions: in the UK there were 1,270 new possessions of regulated mortgages in Q2 2025 which represented a 10% quarterly and 36% annual increase, although possessions remain below pre-Covid levels. [FCA] While BTL possessions in Q2 2025 fell by 2.5% on a quarterly basis, they rose by 11% on an annual basis, and remain above pre-Covid levels.

Homelessness assessments rose by 0.3% in 2024-25, and the number of households in temporary accommodation by 5.6%. In contrast, homelessness applications fell by 0.9%.

In the year to end of June 2025, there were 18,869 all-sector new-build completions in Scotland, a 6% fall on the corresponding period a year earlier; meanwhile, there were 15,202 starts, down by 3%.

In the year to end of June 2025, Affordable Housing Supply Programme (AHSP) completions fell by 27% from 9,381 to 6,851, as did starts (down 22% to 5,313).

Input and Output Prices for New Housing

Annual growth in total pay in the construction sector in Great Britain (GB) slowed from 7.6% in the three months to April 2025 to 4.5% in the three months to July 2025. The annual growth rate in the construction-output price index for new housing has fallen from a peak of 12.3% in June 2022 to 2.7% in June 2025.