The housing market in Edinburgh, the Lothians, Fife and the Borders is showing signs of cooling as the UK recovers from political uncertainty and adjusts to higher interest rates. 

If we compare property sales in November 2019-January 2020 to November 2022-January 2023, we see comparable numbers of properties, highlighting a return to pre-pandemic levels after two years of unprecedented demand. 

The median time for properties to go under offer was 19 days in the past three months, two days slower than the previous year. Comparing this to the same period in 2019, homes went under offer in 23 days in November 2019-January 2020, showing activity levels are now very close to those before the pandemic. 

In November 2022-January 2023, 84.9% of properties sold for their Home Report valuation or higher, with the average property achieving 104.8% of Home Report valuation at sale – highlighting the competitive nature that is still prevalent in the property market in Edinburgh, the Lothians, Fife and the Borders. If we compare this to the last ‘normal’ year before the pandemic, in November 2019-January 2020, properties achieved 102.4% of Home Report valuations at sale – this should provide some reassurance to sellers that the market is continuing to perform well despite speculation to the contrary. 

Prices show shift in balance between demand and supply 

Property prices are now beginning to reflect the shift in balance between demand and supply.  

Buyers were still keen to secure their next home between November 2022 and January 2023, with the average selling price of property across Edinburgh, the Lothians, Fife and the Borders increasing 5.6% year-on-year to £284,614. 

Dunfermline, in West Fife, and East Fife recorded some of the highest price increases over the last three months. The average selling price for homes in Dunfermline was £205,705, an increase of 12.1% annually, while property in East Fife had an average selling price of £301,247, up 13.2% year-on-year.    

The City of Edinburgh saw average property selling prices rise 5.6% annually to £302,073. 

Sales volumes dropped 15.7% annually during this period, while new property listings decreased by 4.1%. 

Another interest rate rise but property market remains robust 

The Bank of England announced another rise in interest rates on 2 February but said that inflation “is likely to have peaked” and a recession would be less severe than previously predicted. 

Paul Hilton, CEO of ESPC, said: “The Bank of England’s latest interest rate rise by half a percentage point to 4% is the tenth increase in borrowing costs in a row and will increase mortgage payments for homeowners on tracker mortgages who will pay about £49 more a month. Those on standard variable rate mortgages face a £31 increase. However, the rates rise should also mean better returns for savers.  

“Buying a property is still a good long-term investment and it is important to seek expert advice. Whilst we would have expected a cooling in the market with the interest rate rises, it is apparent that the market across Scotland has remained robust with properties locally still attracting a premium and selling relatively quickly.”   


What areas are popular with buyers? 

From January-December 2022, property hotspots were Leith, Dunfermline and Corstorphine. 

Many out-of-town areas saw rises in average selling prices in November 2022-January 2023, with two-bed flats in Joppa and Portobello increasing by 12.4% to £304,460 and three-bedroom houses in South Queensferry and Dalmeny rising 11.6% to £312,458.   

There were also price increases in suburban areas with three-bedroom houses in Corstorphine, Clermiston, South Gyle and East Craigs increasing by 8.8% to £410,751. The average selling price of two-bedroom flats in Newington, The Grange and Blackford rose 5.8% annually to £315,904.   

What types of properties are popular? 

There was a significant rise in new property listings in seaside towns in November 2022-January 2023 – South Queensferry, Portobello and Musselburgh (an increase of 200%, 38.1% and 20% respectively).   

Following generally high demand for properties in the past year, one and two-bedroom properties were particularly popular with Edinburgh buyers. 

Two-bed flats in Morningside and one-bed flats in Leith sold the quickest in November 2022-January 2023, in 12 and 13 days respectively.  

What does it all mean? 

Paul Hilton, CEO of ESPC, says: “Despite rising interest rates, political uncertainty and the cost-of-living crisis, home mover confidence is proving positive. 

“There is still strong competition from buyers in Edinburgh, the Lothians, Fife and the Borders with quick selling times and high levels of Home Report valuation being achieved.  

“The spring market is expected to be busy, especially due to clear signs that the predicted recession is going to be less severe than anticipated, and the market returning to pre-pandemic levels which should result in a more balanced market for buyers and sellers alike.” 

Seek expert advice

ESPC is the home of property and we're here to help you with every step of your home buying and selling journey. If you're thinking of buying or selling a property soon, you can make use of our free phone service to be put in touch with a property expert to help answer your questions. Sellers can also get a free property valuation with ESPC agents.