At the close of 2024, the market was buoyant. Activity levels were high, and we saw strong momentum carry into the new year. There was a sense that stability was returning, and early signs suggested we’d see a greater number of homes coming to market, with buyers making competitive offers close to Home Report valuations. Much of that has played out—buyers are still paying, on average, 102 per cent of valuation - but the pace of interest rate reductions has been more cautious than many had hoped.

The market at a glance: patchy but positive

It’s clear from the data that the local market remains active. Some areas have seen standout growth in both selling prices and sales activity, while others show a more measured pace. Coastal hotspots, including Portobello and Dunbar, continue to outperform, reflecting their enduring popularity with buyers looking for lifestyle and location.

Other areas, such as East Lothian, show rising sales volumes but slightly cooling prices, indicating a demand shift towards more affordable options. In Dunfermline, we’re seeing rapid sales and rising prices, but a drop in overall volume, suggesting some friction between affordability and availability.

Overall, the market remains resilient, though slightly slower than this time last year, with average time to sell now plateauing around 26 days. This signals a gradual return to more balanced conditions between buyers and sellers.

What’s driving the change?

The evolving market is being shaped by a mix of economic and localised factors. Interest rates have declined slightly since peaking in August 2023, now sitting at 4.25 per cent. While this easing is welcome, rates remain high compared to pre-pandemic norms, and they continue to affect affordability for many would-be movers.

Our own research shows that nearly a third of buyers have delayed or paused their property plans due to mortgage costs and the wider cost of living. Financial caution is playing a significant role in buyer behaviour, particularly for first-time buyers.

At a local level, demand remains strong for homes in well-connected, attractive neighbourhoods, particularly those offering coastal or semi-rural lifestyles. However, stock levels in these areas remain tight, which puts upward pressure on prices and increases competition.

What this means for sellers

For sellers, it’s increasingly important to take a tailored approach. In high-demand areas, competition among buyers remains strong, and well-presented properties are still selling quickly, often above valuation.

However, in regions where the market is cooling slightly, a more pragmatic strategy may be required. Pricing realistically and working closely with an experienced solicitor estate agent on marketing and presentation will be key to attracting the right buyer.

While transaction times are still fairly quick in hotspots, the market is showing signs of becoming more considered and balanced. Sellers should be aware that the days of frenzied buyer activity are settling into a steadier pace.

What this means for buyers

For buyers, the picture is mixed, but not without opportunity. First-time buyers are still active, particularly in the one- and two-bedroom flat market, where affordability remains relatively accessible. Activity in these segments continues to lead the market.

In areas where prices have stabilised or where sales are moving more slowly, such as parts of East Lothian or larger homes in Dunfermline, buyers may find they have more room to negotiate and secure a property with greater value.
Those who are well-prepared and financially informed can take advantage of calmer conditions, especially as more stock gradually comes onto the market.

Looking ahead: flexibility and local insight are key

The market so far in 2025 paints a picture of steady but evolving activity. While affordability and economic caution are clearly influencing some behaviours, regional demand remains strong, particularly in well-connected and lifestyle-rich areas.

For sellers, success lies in understanding local conditions, setting realistic expectations, and working with knowledgeable professionals. For buyers, being flexible and proactive can open doors to opportunities in less heated segments of the market.

As ever, local knowledge is essential. At ESPC, along with our network of over 130 solicitor estate agents, we remain committed to providing honest, expert advice based on robust data and decades of experience.