Scottish Property Market Update
The Scottish property market continues to transition through a period of adjustment. Following several years of rapid growth, rent levels and sales prices have stabilised, and the sector is now shaped by both evolving legislation and new fiscal measures on the horizon. The combination of market moderation and upcoming policy changes means 2025 is set to be a defining year for landlords, tenants, and homeowners alike.
Property Market Overview
Across Scotland, the rental market remains active but with signs of balance returning. The Citylets Q3 2025 report indicates average rent growth has slowed to around 4–6% annually compared with the double-digit rises seen in recent years. Time to Let (TTL) periods have lengthened in most major cities, suggesting a cooling in demand intensity and slightly more choice for tenants.
In the sales market, transaction levels have steadied, supported by improving buyer confidence and a modest increase in available stock. While affordability remains challenging for some, price growth across most areas has flattened, reflecting a more sustainable pattern of activity.
Local market highlights – Fife and Dundee
In Fife, the average rent stands at approximately £809 per month, showing little change quarter-on-quarter. According to Zoopla, the average sold house price in the area is around £207,597, with detached homes averaging £317,576 and flats £120,788. Listings have increased compared with 2024, signalling greater balance between supply and demand.
In Dundee, average rents currently sit near £862 per month, a slight dip from earlier this year, with one and two-bedroom flats continuing to dominate demand. These figures highlight a more stable market, supported by consistent rental yields and ongoing buyer interest.
Housing (Scotland) Bill – What’s Coming
The Housing (Scotland) Bill introduces one of the most comprehensive sets of reforms to the private rented sector in recent years. The Bill aims to balance tenant protection with landlord accountability and improve overall housing quality.
Key features include:
• Rent Control Areas (RCAs) – Local authorities will have the power to cap rent increases within designated areas (CPI +1%, up to 6%).
• Tenant Rights – Tenants will gain the right to request keeping pets and make reasonable decorative changes, with landlords unable to refuse without valid grounds.
• Damp and Mould Regulations – Stronger requirements for landlords to prevent and resolve damp and mould issues promptly.
• Eviction and Tenancy Reform – Compensation for wrongful eviction to increase (3–36 months’ rent), and joint tenants can end their share without terminating the full lease.
• Homelessness Prevention – Public bodies must ‘ask and act’ when they identify someone at risk of homelessness, improving early intervention and support.
“The Housing (Scotland) Bill has passed Stage 3 and is now awaiting Royal Assent before becoming law.”
Additional policy and tax developments
In addition to housing reforms, landlords and investors face potential fiscal adjustments as part of the UK Autumn Budget, due on 26 November 2025. While full details are still awaited, several key areas are under discussion:
• National Insurance (NI) on Rental Income – Proposals suggest landlords could become liable for NI contributions on rental profits, representing a major shift in taxation policy.
• Capital Gains Tax (CGT) – Current CGT rates remain at 18% (basic) and 24% (higher), though further alignment with income tax or incremental rate rises have been hinted at.
• Mortgage Interest Relief – Ongoing reviews may alter how landlords claim interest costs against profits, particularly for higher-rate taxpayers.
• Transaction and Stamp Duty – Property tax thresholds may be adjusted to stimulate the housing market, though details will likely differ for Scotland given devolved Land and Buildings Transaction Tax (LBTT) rules.
These potential measures underline the need for careful tax planning, particularly for landlords with larger portfolios or impending property sales.
Outlook
With rent growth steadying and sales prices levelling off, the Scottish market appears to be entering a sustainable phase. The Housing (Scotland) Bill will introduce a stronger regulatory framework, and the UK budget could reshape tax considerations for property owners.
For landlords, maintaining compliance, transparency, and long-term strategy will be essential. For tenants and buyers, these changes bring more stability and choice.
At Brikk, we continue to monitor both policy and market trends closely to support clients across Fife, Dundee, and beyond.
