Looking back, the period of July-September 2025 was busy for the market, with many buyers and homeowners believing the worst of the economic turbulence was over and expecting higher interest rates to fall in the months to come, so activity levels were high corresponding to that optimism.

However, with even higher interest rates one year on, and with the onset of the war in Iran raising other living expenses, the financial climate has not changed for the better, which has knocked buyer confidence and resulted in a slower market than expected.

ESPC’s latest House Price Report reveals that during July-September 2026, the market throughout Edinburgh, the Lothians, Fife and the Borders reported lower volumes of sales, more sales falling through, and reduced buyer pressure impacting closing dates and premiums paid.

Sales volumes fell by 9.6 per cent compared with the same time last year, while new property listings remained broadly the same, with a slight decrease of 0.2 per cent. The amount of Home Report valuation achieved also fell, by 0.5 percentage points to 101.9 per cent on average. This aligns with the lower volumes of closing dates during this period, falling from 22.1 per cent to 18.8 per cent. While this is good news for buyers who want to secure homes without the added pressure of closing dates and expensive premiums, it may be concerning for sellers looking to get the best possible price for their property.

Uncertainty around affordability is also affecting the stability of sales. The percentage of sales falling through has risen throughout this year and especially in this period, particularly in Edinburgh, Midlothian and the Borders. In Edinburgh, 12.7 per cent of sales fell through in September, contributing to an overall average of 11.5 per cent in the capital during 2026.

Paul Hilton, CEO of ESPC, said: “The latest figures point to a property market that is cooling rather than contracting, with the wider economic backdrop continuing to influence buyer behaviour. Mortgage rates remain higher than even a year ago, and the effects of previous interest rate rises are still being felt, alongside rising energy and fuel prices, meaning affordability is likely to remain an important consideration for households.

“Fewer properties going to a closing date is perhaps the clearest indication that competition between buyers has eased slightly. However, the market remains steady, with demand continuing to vary considerably between locations and property types. While sales volumes are down compared with an exceptionally strong 2025, the current pattern of activity is more comparable with the market seen around two years ago.”