Podcast: An update on the local property market from March - May 2025

Topics

Key Takeaways

  • Average property prices rose by 3.6% year-on-year, with homes selling around 101.5% of their Home Report value, indicating a more stable market.
  • Listings increased by 4.8% while sales dipped slightly by 1.3%, showing a steady and balanced housing market with more choice for buyers.
  • Stock levels remained almost unchanged and median selling times extended minimally to 27 days, reflecting calm market conditions.
  • Regional hotspots such as the West End of Edinburgh, Stockbridge, Midlothian, and the Scottish Borders saw strong price growth, while areas like Musselburgh, Gorgie, and Dunfermline remain good value for first-time buyers.
  • Interest rates held steady at 4.25% with inflation at 3.5%, supporting cautious optimism for a potential rate cut later in 2025 and a healthy summer market.

 

In this episode of the ESPC Property Show, Paul & Megan discuss the latest ESPC House Price Report which covers the property market activity from March to May 2025.

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Key Insights

House price growth

The ESPC House Price Report revealed that average property prices rose by 3.6% year-on-year between March and May 2025. Homes are now typically selling for around 101.5% of their Home Report valuation, indicating that the market has become more stable. This is a significant shift from previous years when buyers often paid substantial premiums over the asking price. The reduced pressure on buyers to bid aggressively is a welcome development, especially for first-time buyers navigating affordability challenges.

Listings up, sales steady

The number of property listings has increased by 4.8%, a positive sign that more sellers are coming to market. Meanwhile, sales volumes have dipped slightly by 1.3%. Overall, the figures point to a broadly steady and balanced property market in the region, which benefits both buyers and sellers by providing more choice and less volatility.

Stock levels and selling times

Compared to the same period last year, stock levels have remained virtually unchanged - down by just six properties - highlighting the consistency in market supply. The median time to sell a property has extended only slightly to 27 days, up by just one day from last year. This minor change supports the wider narrative of a calm and stable housing environment, where neither buyers nor sellers are feeling undue pressure to rush their decisions.

Regional hotspots

Several areas across Edinburgh and the surrounding regions have shown strong price growth. The Scottish Borders saw an 8.1% increase in average property prices, while Midlothian rose by 6%. Notably, the West End of Edinburgh, including the highly sought-after Stockbridge area, saw an 8.4% rise, bringing average sale prices to £341,299. These figures highlight continued strong demand in traditionally popular and desirable locations.

Value areas for first-time buyers

For buyers seeking more affordable options, areas like Musselburgh, Gorgie, and Dunfermline continue to offer strong value. Dunfermline stands out in particular, where the average price for a two-bedroom flat is just £141,000. These locations remain attractive for first-time buyers who are conscious of budget but still want access to good transport links and community amenities.

Summer market predictions

Looking ahead, a similar summer market pattern to last year is predicted for 2025. While a dip in listings is expected during the first couple of weeks of the school holidays, activity generally rebounds once people return from their travels. Buyer interest, as measured by viewing requests and home report downloads, is already up year-on-year - an encouraging sign that demand will remain healthy throughout the summer.

Interest rates and economic outlook

Interest rates remain steady at 4.25%. With inflation at 3.5%, there is a cautious optimism that a rate cut may come later in the year, possibly dropping to around 3.75% by the end of 2025. While economic growth remains flat, the hosts emphasised that the Edinburgh property market has historically proven resilient and is likely to maintain its momentum.