Scottish Housing Market Review Q4 2024

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 signs of an upward trend in sales. There were 27,816 residential property sales registered across Scotland in Q3 2024 – relative to Q3 2023, this was an increase of 7.9% (2,035), the second consecutive quarter where the annual change in transactions was positive.
• This upward trend in sales is supported by more recent Revenue Scotland data, which shows that across 2024 as a whole, residential LBTT returns were 7.3% higher than in 2023, although they remained 4.4% lower than in 2022.

House Prices

• House prices in Scotland increased annually by 5.0% in Q3 2024 to stand at £198K. This is the highest growth rate since Q3 2022 (7.4%), and the third consecutive quarter where annual house price growth has been positive [Source: UK House Price Index (HPI)].

Private Rental Sector

• In the year to September 2024, data based predominantly on advertised rents show that the average rent on 2-bedroom properties (the most common size) has increased in 17 out of the 18 Broad Rental Market Areas (BRMAs) in Scotland. Average rent increased at the fastest rates in the Lothian (14.0%) and West Lothian (12.2%) BRMAs, but fell by 2.4% in the Greater Glasgow BRMA (although this followed a 22.3% increase the previous year). [Source: Scottish Government]

Mortgage Lending

• New mortgage advances to first-time buyers in Scotland increased annually by 17.1% in Q3 2024, while for home movers the increase was 16.9%. [Source: UK Finance].
• Over the 11-month period up to November 2024, mortgage approvals across the UK have risen by 31% relative to the corresponding period a year earlier. [Source: Bank of England]
• The mean LTV ratio on new mortgages advanced to first-time buyers in Scotland rose from 82.3% in Q2 2024 to 82.4% in Q3 2024, which is close to its recent peak of 83.4% in Q2 2022. The mean ratio fell slightly for home movers from 69.4% in Q2 2024 to 69.3% in Q3 2024. [Source: UK Finance]
• There has also been an increase in the share of all regulated residential lending across the UK with an LTV greater than 90%, which rose by 0.5 percentage points to 7.2%, its highest level since Q2 2008. [Source: UK Finance]
• After a small drop in recent months, the total number of mortgage products increased to 6,508 on 1 January 2025, only slightly lower than the 6,658 products available on 1 July 2024, which was a more-than-15-year high. Buy-to-let (BTL) product numbers increased to 3,321 on 1 January 2025, the highest level in two and a half years [Source: Moneyfacts]
• The recent cuts which have taken Bank Rate from 5.25% to 4.75% have fed into mortgage rates: the average interest rate on new fixed-rate mortgages has fallen from 4.76% in August 2024 to 4.43% in November 2024, while the average new floating rate has fallen from 5.84% to 5.62%. [Source: Bank of England]
• There have been 4 consecutive quarterly declines in the number of regulated mortgage accounts entering arrears in the UK, leading the stock of regulated mortgages in arrears to stabilise at 1.2% of all regulated mortgages in Q3 2024. [Source: FCA]. A similar stabilisation has been seen in the stock of non-regulated mortgages in arrears, while for buy-to-let (BTL) mortgages specifically Q3 2024 saw the third consecutive quarterly decline. [Source: UK Finance].
• New possessions continue to rise due to the previous upward trend in arrears. New regulated mortgage possessions in the UK rose by 34.4% to 968 in Q3 2024, although this was below pre-covid levels (a quarterly average of 1,318 in 2019). Meanwhile new non-regulated mortgage possessions rose by 56.9% to 1,016, which was also above the quarterly average in 2019 (889). If the recent decrease in mortgages entering arrears continues, new possessions may begin to stabilise in the coming quarters. [Source: FCA]

Housing Supply

• All-sector new-build completions for the year to September 2024 totalled 19,828, 2,324 (‑10%) fewer than the year to September 2023. Over the same period, all-sector new build starts fell by 1,954 (-12%) to 14,768. [Source: Scottish Government]
• There were 8,413 affordable homes completed over the year to September 2024, this was 2,373 (22%) fewer than the corresponding period a year earlier. Over the same period, starts fell by 8%, but approvals rose by 9%. [Source: Scottish Government]

Output and Input Prices for New Housing

• Annual growth in the construction output-price index for new housing remains subdued compared to recent years, with the 2.4% for September 2024 comparing to a peak of 12.2% in June 2022. More recently, there has been a slight uptick in construction-material price inflation for new housing, from around zero in recent months to 1.3% in November 2024, although this is well below the peak of 24.0% in June 2022. There has also been a recent uptick in average total pay in the construction sector, which has increased from 1.9% in the 3 months to May 2024 to 6.6% in the 3 months to October 2024. [Sources: UK Government & ONS]

Data to: 13 January 2025

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