Scottish Housing Market Review: Q1 2025

15 Apr 2025 10:53 AM

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

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 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. [Moneyfacts]
• 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

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