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By Marcus Di Rollo, head of Gilson Grey Lettings
The 2020s have been a turbulent time for Scotland’s housing market. Rents and costs surged through the pandemic as shifting existence drove demand past provide and emergency hire caps launched in 2022 added uncertainty to the market, resulting in sharper will increase in new lets as soon as the restrictions eased.
Now, as we transfer into 2026, the sector is coming into a interval of recalibration.
The yr forward is more likely to be outlined by stability slightly than volatility, formed by regional divergence, investor warning and the rising affect of sustainability necessities.
Listed here are the themes we consider will form property subsequent yr.
Market stabilisation
The fast put up‑pandemic development section has now given option to a extra measured surroundings. After the top of hire caps, new‑let rents rose shortly, however the tempo has since cooled, with annual development falling from 13.7% in late 2023 to round 4.4% in early 2025. With inflation easing, actual‑time period development has narrowed, signalling a shift towards a extra predictable and regular market. This calmer backdrop is anticipated to proceed into 2026, providing better readability for each landlords and tenants.
Regional developments
Scotland’s rental panorama is more and more being outlined by native variation. Edinburgh and Glasgow stay resilient, supported by sturdy demand and restricted provide whereas Dundee continues to outperform expectations due to its scholar inhabitants and main funding, together with the plans to construct new properties on a former non-public hospital web site. Cities corresponding to Dumfries and Dunfermline are experiencing agency demand as affordability pressures preserve renters available in the market for longer whereas rural areas and elements of the Borders are softening as family budgets tighten and inhabitants motion slows. These variations will change into much more pronounced in 2026, making native perception extra useful than ever.
Investor panorama and taxation
Taxation and borrowing prices proceed to reshape investor behaviour and this pattern is more likely to proceed into 2026. The Extra Dwelling Complement, now at 8%, has made particular person property purchases costlier and whereas buying six or extra properties can scale back the tax burden, this isn’t a practical choice for many smaller landlords. Mixed with larger rates of interest and ongoing tax complexity, speculative funding has cooled, prompting many who as soon as considered purchase‑to‑let as a pension technique to rethink.
Coverage and legislative outlook
The Housing (Scotland) Invoice proposes adjustments designed to make renting extra versatile for tenants, together with clearer guidelines round pets and redecorating. Any future hire‑management measures will have to be focused and time‑restricted if they’re to keep away from harming provide whereas rates of interest will proceed to affect affordability and investor confidence. Above all, a predictable coverage surroundings will probably be essential for sustaining stability all through 2026.
Provide resilience
The non-public rented sector has contracted by round 10,000 properties over the previous two years, which is much less extreme than anticipated. Many landlords have chosen to carry slightly than exit, serving to preserve a steady base of high quality properties. This resilience is important for cities that depend upon versatile housing for college kids and key staff. Preserving this provide will probably be important to keep away from renewed upward strain on rents in 2026.
Sustainability and EPC requirements
Power efficiency necessities are set to tighten towards the top of the last decade, and 2026 will probably be a pivotal yr for planning and preparation. Upgrading older properties stays pricey, with some requiring as much as £30,000 of labor and uncertainty round timelines and funding dangers slowing the market as landlords hesitate to commit. Clearer authorities steerage, curiosity‑free loans and phased enchancment pathways would assist make sure the transition doesn’t scale back provide. For buyers, EPC compliance will more and more form buying selections over the following few years.
Predictions for 2026
General, rental development in 2026 is more likely to stay modest, at round 2–3% for brand new lets. Edinburgh, Glasgow and Dundee are anticipated to proceed main the market, whereas effectively‑linked smaller cities with sturdy facilities will provide selective alternatives. For tenants, 2026 ought to convey a extra steady market, clearer guidelines and improved selection as upgraded properties start to enter the system.
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