Page 14 - ESPC_JAN26

EXPERT ADVICE

2026 property market predictions Political landscape:
Watching and waiting
ESPC’s CEO, Paul Hilton, shares his insights into what he
The Scottish Budget may shape broader
expects for the housing market in 2026.
economic planning. However, following the UK
Budget’s minimal impact on housing activity
last year, I anticipate a similarly steady approach
from the Scottish Government with no major
disruptions expected at this pivotal time.

The bigger political question mark is the May
2026 Scottish Parliamentary elections. The
run-up to polling day may cause some buyers
and sellers to delay decisions until results are
known and policies become clearer. I expect
we’ll see a summer boost to the market following
the elections as clarity and confidence return -
much like the release of pent-up demand we’re
anticipating at the start of the year.

For those of us in the industry, the elections
present an opportunity for meaningful LBTT
reform and increased support for first-time
025 certainly reminded us that
the property market rarely follows buyers in high-price areas. Longer-term,
2 a predictable path. While we saw legislation like the Heat in Buildings Bill,
healthy activity through much of the year, Lower borrowing costs will unlock movement currently paused and due to be re-tabled after
the final quarter brought an unexpected lull right across the market, but particularly for first- the May elections, may eventually impact
as Westminster budget uncertainty caused time buyers and those looking to upsize who homeowners and buyers, while the council tax
buyers and sellers alike to pause and take have been waiting on the sidelines. Combined review could affect property running costs.
stock. Rather than viewing this as weakness, with wage inflation continuing to outstrip
I believe we’re looking at significant pent-up house price growth, currently running at 4.6%
demand that will fuel a strong start to 2026. compared to our predicted 3.5% property price A shifting dynamic:
After all, people still need to move - they’re increase, 2026 could see real improvements in Fall-throughs and buyer selection
just choosing their timing more carefully. affordability for many households.
One trend that grew throughout 2025, and
Interest rates: A healthy market ahead unfortunately I expect will continue into
2026, is the number of properties returning
The game-changer for 2026 Despite the slower pace to Q4 2025, I’m to market after sales fail to proceed. This is
optimistic about 2026. We expect sales prices to
The Bank of England’s recent base rate currently sitting at around 10%, up from 7% in
reduction has already begun to shift continue rising in the region of 3.5%, supported 2021. This is reshaping how sellers approach
sentiment, and I expect this is just the by plenty of demand. The year will likely start buyer selection, with many now looking
beginning. We anticipate further cuts strongly as that pent-up demand translates into beyond just the highest offer to factors
throughout 2026, with Goldman Sachs action, giving buyers more choice and keeping like chain position and mortgage certainty.
boldly predicting rates could reach 3% by prices steady. Sellers will continue to command This shift could introduce more favourable
summer - a level we haven’t seen since a small premium, though the days of routine 10- conditions for first-time buyers, who bring
2022. This would be transformative for buyer 20% over Home Report valuation remain firmly certainty as chain-free purchasers and will be
confidence and affordability across Scotland. in the past. pivotal in keeping property chains moving.

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