Scottish housing market resilience ‘threatened by multiple headwinds’

UK house prices were flat in the same period.

The average house price in Scotland in March was £186,582, down 0.2% from February 2026.

Jennifer Lewis, senior analyst for real estate and construction at RSM UK, said: “While the annual growth in Scottish house prices show some growth, the month-on-month decline for March 2026 is a stark indication of the pressures faced by the sector following the onset of the conflict in the Middle East.

“The number of mortgage approvals in March were above average when compared to the previous six months, despite significant increases in mortgage rates, the uncertainty ahead of the Scottish elections, and the ongoing cost of living spike.

“However, this is likely driven by a rush for approvals before the rate increases come into effect, rather than a boost in appetite from buyers. With UK borrowing cost increases being some of the highest in Europe, mortgage rate hikes are expected to hamper market demand in the coming months.

“Construction costs for new-build homes continue to rise, exacerbated by low volumes, and the process for planning approvals in Scotland continues to lag behind other parts of the UK.

“Following the Scottish elections, in which the Scottish government pledged to increase housebuilding numbers, the sector will need to see urgent support from the government to improve the viability of projects in 2026 and facilitate its long-term growth amid a challenging economic environment.”

A Registers of Scotland spokesperson said: “There was an increase of 1.6% (to £187,000) in the average house price for Scotland in the 12 months to March 2026. This compares to an  increase no change in average house prices for the UK as a whole, at £268,000”