Presenting the firm’s latest analysis, Faisal Choudhry, head of research for Savills Scotland, and John Forsyth, head of residential sales for Savills Edinburgh, said the capital continues to outperform both Scotland and the wider UK, but warned that the market “rewards realism, not overconfidence”.

A market outperforming - but not overheating

Against a backdrop of global uncertainty, shifting taxation and higher borrowing costs, Savills reported that Edinburgh entered 2026 with steady pricing, deep demand and solid underlying fundamentals. But the firm speakers stressed that the city’s performance reflects stability rather than acceleration, and that buyers are more selective than ever.

“Edinburgh is holding up better than most places, but this is not a runaway market,” Forsyth said. “The strength we’re seeing is grounded in fundamentals, not froth - and sellers need to be priced accurately to achieve results.”

The Savills prime index shows Edinburgh was one of the UK’s best‑performing city markets in Q4 2025, second only to Hackney in London. But the firm cautioned that wider UK momentum has softened in early 2026, and Edinburgh is not immune to global and domestic pressures.

Deep demand – but only for the right stock

Savills highlighted the city’s stark supply imbalance: For every new property launched, nine new buyers register interest. This remains a powerful driver of competition, particularly for well‑located family homes and premium stock. Yet the firm emphasised that this demand does not translate into blanket strength.

John Forsyth said: “Edinburgh’s ratio of nine buyers for every new instruction significantly outstrips other UK markets: Glasgow sits at five, St Andrews, Perth and Stirling at around 4.5, and central London offices at only one or two. This sharp contrast underlines the capital’s uniquely competitive environment.”

Mr Forsyth told said: “The market is discerning. Well‑presented homes priced correctly are performing strongly - but anything mis‑pitched risks sitting for longer. Accurate pricing is critical.”

Half of Edinburgh’s recent buyers came from outside the city, reflecting its global appeal and economic pull. But supply remains tight across almost all price points, keeping conditions competitive - though not uniformly buoyant.

Selective strength at the upper end

High‑value homes above £750,000 continue to attract interest, with several neighbourhoods - including the West End, Stockbridge and Dean Village - outperforming. Edinburgh also achieved a record £6 million sale in 2025. However, Savills warned that other segments, particularly the apartment market, remain sensitive to price, lending conditions and the rising costs associated with second‑home ownership.

East Lothian continues to benefit from the capital’s constrained supply, recording a record 38 £1m+ sales in 2025. International interest is growing, and competition remains strong for high‑quality stock.

Outlook: cautious realism for 2026

Savills expects the short term to remain finely balanced, shaped by mortgage‑rate sensitivity, geopolitical uncertainty, and cost‑of‑living pressures.  However, the firm highlighted improving prospects beyond 2026 as lending conditions ease and wage growth strengthens.

“The medium‑term fundamentals remain supportive,” Mr Choudhry said. “But in the here and now, success depends on sensible expectations and pricing in line with current conditions.”

Mr Forsyth added: “This is a resilient market, not an exuberant one – but for the right homes, correctly priced, Edinburgh continues to deliver.”