Scotland resilient despite housing market’s collapse south of the Border

David J Alexander ​says the contrast with the collapse in the number of sales in England and Wales is remarkable.

It has been clear for some time that the housing market across the UK is slowing after years of growth. While everyone would expect all parts of the country to be impacted slightly differently the contrast between England and Wales and Scotland could not be more pronounced.

The latest monthly house sales volume figures highlight a collapse in England and Wales of 67.4 per cent in one year from 124,505 in March 2025 to 40,500 in February 2026 (the latest period for which there is official data. This is a fall of 84,005 in monthly house sales volume in just one year.

While there has also been a substantial fall in monthly sales volume in Scotland this is at a much lower percentage – dropping 18.9 per cent from 7,636 to 6,190 over the same period.

But looking further into the figures you find that the fall in the monthly sales volume of mortgage purchases is even more pronounced in England and Wales, dropping 81.1 per cent while in Scotland it is remarkably similar to the overall fall at 18.7 per cent. This much greater drop in mortgage purchases in England and Wales compared to Scotland is unusual.

The reasons for the drop in sales volume across the UK are varied but will include inflation remaining stubbornly high at around 2.8 per cent impacting upon the Bank of England’s ability to reduce mortgage rates; the continued cost of living crisis affecting affordability; economic and political instability both internationally and domestically hitting confidence; and concerns about rising unemployment making future viability a concern.

These are broad factors which always affect the housing market directly but will improve if circumstances change. An end to the wars in Ukraine and Iran internationally, and domestic economic policy adjusting to produce more growth and employment would quickly improve housing market conditions. Housing is always quite an emotive market that responds rapidly and substantially to conditions, particularly if there are any concerns about property prices falling, unemployment rising, or the economy failing.

But the difference between Scotland and the rest of the UK is interesting. It is partially a reflection of the sales system in Scotland which benefits from a more clearcut selling process which precludes most people being able to withdraw from a sale, making it a more efficient and speedier method for both buyers and sellers.

Equally, demand remains relatively strong here and there has not been the collapse in confidence which has occurred in England and Wales. Of course, this varies from area to area, but the Central Belt in Scotland remains extremely active and dynamic, with Edinburgh and Glasgow and their surrounding areas still in demand and commanding reasonable prices.

It remains to be seen what the incoming Prime Minister can do to stabilise and grow the economy and provide wider confidence in the markets but it is clear that housing is particularly susceptible to uncertainty. We will see in a few months whether things have improved or continue on a downward course. Reducing the costs of buying a home along with lower mortgage rates are two ways in which government can assist the housing market in the coming year. We shall see what priority Andy Burnham places on the housing sector in his forthcoming statements and Autumn Budget.