Market Analysis: 2025 in summary, predictions for 2026

As we reach the end of 2025 we are excited to take a look back at our year in Estate Agency. The two words that immediately spring to mind are robustness and resilience. This year, although successful for many purchasers and sellers, brought with it many challenges for the general property market.

Longer selling periods

Zoopla reported that in 2025 across the UK the average time it took for a property to sell increased to 38 days (up from 35 days in 2024). Those turnaround times are bolstered by Scottish sales as  the top ten of the reported fastest moving markets were located in Scotland. This is perhaps a testament to the differing systems with the requirement for a Home Report in Scotland having a positive influence by creating more convenience and certainty for buyers. Rightmove reported in December that Scotland continued to be the quickest market in Great Britain with properties taking 37 days on average to find a buyer which is significantly quicker than the 58-78 days reported for England and Wales for that month.

Housing Crisis

While the housing market remained a prominent topic throughout the year, ongoing labour and supply constraints- particularly among bricklayers, green-tech specialists and plumbers- shaped the pace of development.   New properties were slow to come to the market, contributing to higher construction costs and, in turn, increased house prices

Listings Down

2025 started strong with an increase in the number of new sellers coming to the market. In the first half of the year listings were up 9% from the same period in the previous year. However the second half of the year did not bring such positive news with national listings down 4% year on year.

Market Uncertainty

Looking at the statistics the budget appears to have had a significant impact on the market during the second half of the year. Many sellers held off listing their properties and purchasers were anxious about moving forward with offers until the outcome was clear.   The actual impact of the proposed budget changes on the property market was minimal. Higher taxation of landlords might generate a buzz in the lower end of the market with profit margins being squeezed and rental prices potentially rising. Declining profitability in the rental sector may mean that landlords are encouraged to sell. Lower margins will likely mean that landlords look to increase rents which might in turn motivate renters to look to buy.

2025 In Summary

Our Estate Agent Kenneth Laing noted “ my prediction last year was that 2025 was going to be better than the year before, and despite the market throwing some tricky twists and turns that has been proven to be the case here at Blackwood & Smith. The Scottish market showed improvement in most areas, with the Scottish Borders in general out performing most of the country when it comes to statistics.”

According to the Office for National Statistics provisional figures released in September 2025 the average houses prices in the Scottish Borders increased on the previous 12 months. Detached houses showed a 2% increase, Semi-detached 2.9%, Terraced 2.8% and Flats were down -0.8%. The latest data released by the ESPC showed house price averages from September to November across Edinburgh, the Lothians, Fife and the Borders rising up 5.15% from the previous year. Across  the same September to November period  house prices in the Scottish Borders rose 10.3% as a year on year comparison. The Scottish average price increase of 5.8% ( to April 2025 ), suggests the Borders (especially specific desirable locations) are outpacing the national trend, reflecting sustained demand.

Why is this so?

Rightmove have recently released data showing the top five features searched for by home buyers in 2025. The most searched for features  are “Garage”, “Annexe”, “Acre”, “Garden”, “Rural”.  Zoopla backed this wish list up with their top keyword searches for 2025 being, “Garage” (and “Double Garage”), “Annexe”, “Acres”, “Pool” and “Rural”.  Whilst we sell all over Scotland (very successfully) a high percentage of our property sales are within the Scottish Borders. We have seen these search trends translate directly into our office this year.

It appears that non urban attractions offering lifestyle choices such as privacy, more space, views, quieter living, have been top on our viewers lists. . Scotland outperformed most parts of the UK this year when it came to growth, and as alluded to by Kenneth last year, factors such as lower density housing and a deeper community spirit, all create a strong continuing demand for people wishing  to live in Borders towns and villages.

Our Estate Agency department and support team have seen an extremely positive year.  For us pricing held throughout 2025 with most properties sold at or around  home report value, with sellers being confident and holding steady to achieve this. We saw some fantastic results with a number of properties achieving significantly over Home Report both at closing dates and some within days of coming to market.

In general buyers have been a little more cautious, taking more time to reach an informed decision, and as always the bigger picture in what is happening is forever present.

Factors such as fuel, utilities, food and general costs of living keep increasing, with interest rates still high. Regarding the latter there is some hope with the recent quarter percent drop in the base rate, and with the Bank of England suggesting a further drop very soon. The average two – year fixed rate for a mortgage is currently 4.33% which is down from last year’s 5.08%.  We are seeing in recent months more and more first- time buyers entering the market, which is paramount as they prop up sales further up the ladder, and allow more movement in the market.

The higher end of the ladder has been a tricker slower moving market however we continued to actively market these properties and seek out opportunities. There is currently a wide supply of family homes in the Borders.  Due to this some properties at this level are also taking a while to sell. Buyers in the middle bracket currently have a lot more choice than usual, and so if this continues and buyers have lots of properties to choose from this will likely dictate competitive pricing strategies in the coming year. Our advice will remain to price accurately and competitively. The lower end of the ladder is continuing to sell well, with demand outstripping supply. We expect that this  trend will continue for the foreseeable future, and if sellers are realistic then we expect more movement and activity to pursue.  Life continues regardless of market projections and predictions and will often necessitate property changes. Death, divorce, growing families, downsizing all mean that we usually see a steady supply of houses on the market regardless of season.

Looking Ahead

Kenneth is once again predicting a positive position for the upcoming year, “We at Blackwood & Smith believe the market will remain to be robust for 2026, but predict price growth may be a little slower. Demand is always present, but buyers and sellers may have to be a little patient in order to secure their perfect abode.”

With the uncertainty of the budget out of the way, and interest rates coming south, we truly believe 2026 will be another positive year. According to the latest RICS (Royal Institution of Chartered Surveyors) Residential Market Survey (polling RICS-member Chartered Surveyors who work in the UK residential sales and lettings markets), a net balance of 39% of Scottish participants in the survey responded to say that they thought that house prices will rise over the next three months. This is highest positive response to this question since December 2024. A net balance of 34% the Scottish respondents also expected sales to increase which is another increase in the previous results which saw a positive response from only 29%. The RICS UK Residential Market Survey is used by a number of key institutions such as the government, the Bank of England and International Monetary Fund which makes their report one of the leading indicators for the property industry. Good news stories translate to higher buyer and seller confidence .If the consistent supply of property continues this should help keep inflation lower, and confidence high. We have seen a continued interest from buyers from south of the Border and Edinburgh, and towns like Peebles, with their abundance of amenities our local areas are proving to be popular with purchasers looking for a more rural lifestyle. Edinburgh’s commuter towns continue to be desirable for the same reasons. Locally the recent opening of the new high school building in Peebles has been very positive. Good news continues for families with a new high school building in Galashiels earmarked to open  opening next year and  approval granted for a new high school building in Hawick too. The draw of Edinburgh and its almost limitless educational, food and entertainment offerings will continue to equate to popular listing and motivated purchasers. Of course he news wont all be positive and there will always be macroeconomic factors in play. With the Scottish election nearing this might cause some disruption to the market but we predict that the long term resilience of the local, and wider Scottish market will continue.. Our January is already looking to be a very busy month for new properties and we hope that the early sales market will be fortified by the “Boxing Day bounce”. In what appears to have become a yearly tradition a surge in marketing activity happens on Boxing Day with people looking to list their current property and start their search for a new one. Rightmove is predicting a higher than usual bounce due to sellers waiting to list their homes until after the budget.

Expectations of improvements in buyer affordability and increased stock make for an optimistic outlook for next year. Like many others in the market we expect this to make for a stronger market in 2026 with increased market activity and a rise in average property prices. Our prediction for next year is that whilst it won’t pass without some bumps in the road we think that it is certainly is full of potential.

On a more personal level our Estate Agency team enjoyed a highly successful year.  We made significant investments  in technology and worked extremely hard to ensure the information we provide to our clients for valuation and throughout the sale process is as helpful and informative as possible. We welcomed a fantastic new member of the team and continued our commitment to training and customer care.
Our  performance continued to strengthen and we excelled in all areas including in our core selling areas (EH43, EH44, EH45 and EH46)  we achieved significantly higher-than- average property views, shorter average time on market and a notably low proportion of price reductions (as demonstrated by our Rightmove statistics).

We have  exciting plans for 2026 and  look forward to supporting you on your buying, selling or just window shopping journey! Whatever you need, we will try to offer our expertise and advice in the most helpful way we can.   We are truly honoured to have been trusted to sell so many of your homes in 2025 and we are really looking forward  to another busy year of helping you downsize, find more space, relocate,  buy your first home, move home and everything in between.

We hope you all have a super festive period and as always we are here when you need us.