Many areas within the ESPC regions experienced this trend, particularly the Borders which saw the largest decrease of 9.7%, taking average selling prices there to £226,659, and the City of Edinburgh, where the average selling price declined 3.1% annually to £305,976.

Examining the data from Edinburgh itself, the city centre saw prices fall 15.7% year-on-year, taking the average selling price from £374,912 to £316,087. Two-bedroom flats in the New Town and West End were the worst affected, dropping 18.3% to a new average of £392,696.

There was a dramatic increase of 39% year-on-year in the volume of homes sold priced under the LBTT threshold (£175,000), and a 23% reduction in properties sold for over £500,000, which would skew the figures for the market overall. With the ongoing discussion around short-term lets and rental legislation, perhaps these figures could be attributed to landlords putting their properties (typically smaller, lower-priced abodes) onto the market in higher volumes.

However, in the North West of the city, property selling prices rose 7.7% to £309,055. Family homes were still highly sought-after in the capital too; three-bedroom houses in Cramond, Barnton and Cammo saw a 28.6% increase in average selling price, to £488,953. With stiff competition for schooling, perhaps this can be attributed to a burst of new families looking to move to the area in time for application deadlines later this year.

Overall, two-bedroom flats in Dunfermline were the most affordable across Edinburgh, the Lothians, Fife and the Borders, with an average selling price of £131,610.

Properties took longer to sell and closing dates were in decline

Overall, properties took longer to go under offer during June-August 2023, taking a median time of 20 days – this is seven days longer than the same time in 2022. The market has shown signs of cooling in several areas and coupled with June-August being a traditionally quieter time for the property market overall, it’s not a surprise to see homes staying on the market for longer.

A total of 28.4% of properties on the market went to a closing date, down from 37.7% in 2022, showing that the frenzy of the past few years has truly calmed, and is returning to the more ‘normal’ levels of activity seen pre-pandemic.

In good news for first-time buyers, there was a significant increase in the volume of properties being listed for a fixed price – this type of listing increased 58% year-on-year during June-August 2023.

Two-bedroom flats in popular Bonnington sold the fastest overall, going under offer in a median time of 10 days – 11 days faster than during June-August 2022. With its proximity to Leith’s sought-after amenities and the city centre, Bonnington is proving to be a popular destination for first-time buyers, property investors and young families alike.

Volumes and insertions both declined during a typically quieter period

The property market during June-August 2023 shows that there were less properties coming to the market, and less sales – however, in a typically quieter period, this is not a surprise to see.

Overall, sales volumes were down 10.5% year-on-year. Dunfermline was the area with the highest volume of property sales, however this figure was down 27.7% on June-August 2022, when activity levels in the market generally were higher. With the lessening popularity of working-from-home, more buyers could be looking for properties closer to the Capital, rather than in this commuter hotspot which saw incredible demand in recent years.

Two-bedroom flats in Leith were the most popular property type to sell, very closely followed by one-bedroom flats in the same area. The sales volume of Leith two-beds was down 19.4%, however one-bed sales volumes were up 38.2%, showing that Leith was very popular with buyers with a slightly lower budget, such as first-time buyers, perhaps looking to take advantage of this area’s trendy reputation and brand-new tram extension, which launched in June.

There was a small decrease in the number of properties coming to the market, with insertions down 3.3% across all areas. Dunfermline had the most properties listed for sale, with this figure up 4.6% on last year.

Buyers bid less over the Home Report valuation overall as demand settled

The frenzy of the previous few years, since Summer 2020, has seen a marked cooling so far in 2023, and this is clear to see in the figures surrounding Home Report valuations and overbids from buyers. During June-August 2023, 80.7% of homes for sale sold for at least their Home Report valuation, down from 93.1% of properties last year, showing that buyers are beginning to see the benefits of the market and can make lower offers, or even take advantage of the increase in fixed-price properties available, some of which are marketed at Home Report value or even lower.

Overall, properties sold during this time achieved 103.8% of their Home Report valuation, down 4.9 percentage points on the same time last year.
All areas in the ESPC market experienced a drop in the amount of Home Report valuation that was attained. East Lothian was the worst affected, with a drop of 7.2 percentage points taking the average amount paid to 104.5% – however, this was still the highest amount paid overall compared to the other ESPC regions.

East Fife fared better, as a drop of 2.7 percentage points took the average amount paid to 104.1%. West Lothian properties offered the best bargain for buyers on a budget, achieving on average 100.7% of their Home Report valuation, down 6.6 percentage points on June-August 2022.

Paul Hilton, CEO of ESPC, said: “The three months of June-August are typically a quieter period for the property market, but it’s easy to lose sight of that when you compare it to the extraordinarily high levels of activity we have seen in the past few years.

“If we break away from that, the figures published today are what we’d expect to see for this time of year and the current climate.

“The market is going through a period of cooling generally, and with many buyers and sellers away on holiday or taking time with their families, there is usually always a period of downtime, so the decline in figures across the board is not a shock.”

Mr Hilton continued: “While the data undoubtedly shows some decreases in areas like Edinburgh City Centre, the data suggests that a higher volume of smaller, cheaper properties coming onto the market has affected the figures, but we will know more about the market’s performance in this area next month.

“Certain areas and property types are still generating strong levels of demand – homes in East Fife and East Lothian are still attracting buyers in strong numbers who are willing to pay a premium, and in Edinburgh, family homes in the Northern suburbs and flats in first time-buyer-friendly Leith and Bonnington show that the market is still extremely brisk.

“It’s also encouraging to see figures that mean the market is becoming more accessible to first-time buyers. With reductions in the number of properties selling for at least their Home Report valuations, significant increases in fixed-price listings and a decline in the amount of Home Report valuation paid, buyers with lower budgets have a better chance of finding a property in their ideal locations, and it shows that sellers have more of an open mind when it comes to the price they hope to achieve.

He concluded: “While across the UK, the data around house prices and the property market seems severe, but the Scottish market overall appears to be more resilient and less dramatically impacted than the market across the rest of the UK.

“If you’re thinking of buying or selling a property in Edinburgh, the Lothians, Fife or the Borders, contact your local ESPC solicitor estate agent today.”