House market gloom has not infected Scotland yet

Concerns in England Wales have not spread north but there could still be trouble ahead, writes ​​David J Alexander.

In England and Wales there are concerns that the housing market is in difficulty. Prices are static or falling in some areas and homeowners, lenders, and advisers are worried over how long this period of uncertainty will last. The latest figures confirm this view with average house prices in England and Wales rising by just £2,980, which was an increase of 1.04 per cent in the 12 months from July 2025 to June 2026.

By contrast Scotland had a more positive experience with house prices up £3,471 (1.8 per cent) increasing from £191,884 to £195,355. June had the second highest average figure ever and, while it is not an enormous increase, it still seems as if there is some momentum in the market.

Why the two adjacent housing markets should be performing so differently is unusual. That prices are higher both by percentage and by value in Scotland compared to England and Wales highlights just how the market has diverged across the Border.

The whole country is impacted by the static level of interest rates, the cost-of-living crisis facing the UK economy at present, and rising levels of unemployment. Yet Scotland’s housing market remains relatively stable. Add in the recent events this period covers including the invasion of Iran by President Trump and the continued impasse over the Strait of Hormuz and the downward pressure on house prices is acute.

It is, inevitably, not a linear story. There are substantial variations across Scotland with Moray recording the highest increase of £15,161; South Ayrshire rose by £13,754; East Dunbartonshire up £13,123; Highland £12,583 higher; and Edinburgh increasing by £10,737.

At the other end of the scale seven areas recorded price falls over the same period. In Aberdeen city prices fell by £11,326; Aberdeenshire down £5,545; East Lothian dropped £4,958; Clackmannanshire was down by £4,645; Argyll and Bute fell £4,632; Perth and Kinross was £4,167 lower; while Inverclyde saw the smallest reduction of £372.

The most expensive place to buy a home in Scotland is Edinburgh with an average price of £303,067; followed by East Renfrewshire at £295,309; East Lothian on £280,383; Midlothian at £281,662; and East Dunbartonshire on £268,922.

These numbers may reflect a shift in locations as some areas in the Central Belt become unaffordable and buyers seek properties in adjacent regions.

The continuing uncertainty over the future of the oil and gas industry continues to take its toll on Aberdeen and the surrounding areas with a quite astonishing 7.8 per cent fall in average prices making it the second cheapest part of the country to buy a home after Inverclyde.

Ten years ago, average prices in Aberdeen were higher than Edinburgh whereas now there is a difference of over £170,000. It is concerning that there is almost a £200,000 difference between the cheapest and most expensive parts of Scotland to buy indicating a growing wealth gap.

Edinburgh continues to soar above most other parts of the country as it attracts high earners with GDP in Edinburgh exceeding London for the first time in June 2025.

Although the average price increase over the last 12 months is quite modest it is still positive, indicating a resilience and vibrancy in the market that may have been lost in England and Wales. The next year will be interesting to see if this is maintained as negative economic headwinds persist.