1. Scotland’s prime market shows resilience in the face of taxation challenges 
2. Prime prices remain relatively stable so far this year
3. Demand in sought-after school catchment areas drives city markets
4. Demand for high quality homes near amenities supports prime Perthshire
5. Wider economic uncertainty has the potential to curtail growth

1. Scotland’s prime market shows resilience in the face of taxation challenges  

Five years on from the start of the Covid-19 pandemic, Scotland’s equity-driven prime market above £500,000 continues to outperform, despite increased taxation for additional homes and VAT on private school fees. Fuelled by strong price growth, net agreed prime sales during Q1 2025 increased year-on-year by 11% compared to 3% across the wider Scottish market, according to data provider TwentyCi.

Prime Scotland sales growth was on a par with regions outside London, however monthly performance in Scotland was varied. A strong start to the year in January was followed by a stable February. However, the market picked up again in March led by sales up to £750,000.

In a sign of further positivity, sales growth has outpaced the level of new supply so far this year and the number of prime agreed sales falling through - though still relatively high - is beginning to stabilise. With larger properties spending less time on the market in many areas, available stock is -16% below its September 2024 peak.

That said, there is still a high number of properties having a change in their asking price, with more stock expected to launch this summer. Looking ahead, possible market disruption and the impact on consumer confidence due to volatility in the stock markets and uncertainty over the US approach to trade tariffs means a price sensitive market in the short to medium term. However, the prospect of an easing in mortgage rates will support wider market activity.

2. Prime prices remain relatively stable so far this year

With supply and demand relatively balanced, prime Scotland prices have shown stability over the last two years with no discernible upward or downward movement. Following a slight quarterly drop of -0.1% in December last year, prime prices increased by 0.2% in the three months to March 2025, with prime regional prices outside London seeing no change, according to the Savills prime index. This leaves prime Scottish prices level compared to a year ago but 15.7% higher than in March 2020 before the beginning of the pandemic.

The trends witnessed in the prime sales market have also played out in price performance, with properties up to £750,000 slightly outperforming those above this level. However, in Scotland’s rarefied £2 million plus country house market, which is more reliant on international buyers, prices fell slightly by -0.3% in the three months to March 2025.

3. Demand in sought-after school catchment areas drives city markets

Although prime Edinburgh City prices are -1.1% lower than a year ago, there was an increase of 0.4% in the three months to March 2025, with little change in the level of new supply or available stock compared to a year ago. Here, appropriately priced flats within school catchment areas are selling well. Family houses are still very popular, but the more discretionary levels of the market remain challenging.

New supply was also somewhat constrained in the first quarter of 2025 across the prime country markets surrounding Edinburgh, which impacted the number of agreed sales. Here, prime prices fell slightly by -0.3% in the in the three months to March 2025 however they were 1.0% higher than a year ago, with an uptick more recently in agreed sales for previously launched stock, enabled by realistic pricing.

An increase in prime agreed sales was also witnessed in Glasgow and its surrounding areas during Q1 2025, supported by movement into the catchment areas of sought-after schools. However, there is constrained supply, particularly in Glasgow’s prime west end, where underlying demand is strong. Here, mid-market flats continue to attract multiple bids and significant premiums over Home Report values.

These factors contributed to an increase of 1.0% in prime Glasgow City prices in the three months to March 2025. Meanwhile, prime prices in the country markets around Glasgow increased by 0.4% in the three months to March 2025, supported by buoyant second home markets, especially in Argyll and Bute.

4. Demand for high quality homes near amenities supports prime Perthshire

Prime Perthshire sales above £500,000 rose during the first quarter, driven by demand for modern and energy efficient homes that are close to Auchterarder and Gleneagles and schools near Perth and Crieff. Alongside sales growth, prime Perthshire prices increased by 0.5% in the three months to March 2025. This was the first upward movement in prices in two years although they are -3.2% lower than a year ago.

Prime prices in Angus and southern Kincardineshire were level during Q1 2025 however the number of agreed sales particularly in the market from £500,000 to £750,000 saw an increase.

The sought-after suburbs of Bieldside, Cults and Milltimber led the recovery in agreed sales in Aberdeen area market above £500,000, with stability in pricing backed by an easing in the level of available prime stock. Here, mainstream market conditions remain challenging with the incentivised new build market applying pressure on second hand prices.

5. Wider economic uncertainty has the potential to curtail growth

Looking forward, a recent uptick in buyers registering with Savills to purchase a prime Scottish property provides cause for optimism. However, volatility in the stock markets and uncertainty over the US approach to trade tariffs is likely to mean the continuation of a price-sensitive market, with activity dominated by needs-based buyers and sellers and demand for “best in class” properties remaining most resilient.

The prospect of base rate cuts being brought forward points to a more competitive mortgage market that will benefit committed buyers. While that should support the market over the medium term, in the short term, we expect that to sit against the context of more sensitive buyer sentiment which will require sellers to remain pragmatic around pricing.

< View our latest Q1 2025 updates here.

For more information, please contact your nearest Scotland office or arrange a market appraisal with one of our local experts.