The Edinburgh and Lothians property market, known for its historical resilience, has once again demonstrated its strength by swiftly rebounding from the disruption caused by Liz Truss and Kwasi Kwarteng’s ill-fated mini-budget, which led to a significant spike in mortgage interest rates in late 2023/early 2024. While rates are unlikely to return to the historically low levels seen during the pandemic, they have fallen considerably from their peaks in early 2023 and appear poised to decrease further in 2025 as UK inflation remains under control and lenders compete to offer the best deals.
Economists expect the Bank of England to cut interest rates at least four times in 2025 as officials look to boost economic growth. A Times poll of 51 economists found that they believe the base rate will fall to at least 3.75% in the year ahead, from the current rate of 4.75%.
According to the latest ESPC house price report, property prices in our area have seen a modest year-on-year increase of approximately 2.3%, suggesting a balanced market—an unusual but welcome situation for both buyers and sellers. Buyers now enjoy a wider selection, around 13% more properties were available in 2024 compared to 2023, while many sellers are still achieving premiums over Home Report values. Notably, Neilsons’ sellers are consistently securing higher returns and more closing dates than the ESPC averages. In 2024, Neilsons’ average selling price was up 9% compared to 2023. The ESPC average last year was 2%.
However, the market remains price-sensitive. If you are selling, this underscores the importance of accurate professional valuation from the outset and a well-thought-out marketing strategy. Effective marketing tools, such as those provided by Neilsons, are crucial to standing out in the competitive landscape and achieving a swift and successful sale.
If you are buying, it’s vital you have an experienced Solicitor who is experienced, understands the market, and can guide you accordingly on Offering. Whilst there are slightly more fixed prices than previously, closing dates are still a feature of the market in 30% of cases. Every property requires it’s own detailed research, analysis and guidance accordingly, and Neilsons have a wealth of resources and innovative systems – exclusive to Neilsons – at out fingertips to guide our purchase clients.
Where do we think the market will go from here?
Edinburgh and its surrounding areas remain highly desirable places to live, with a growing population and an economy expected to outperform other parts of the UK in the coming years. The advantage of a system that utilises professionally regulated Solicitor Estate Agents, along with the upfront details provided in the Home Report, enhances market conditions here compared to other countries in the UK.
Edinburgh is a geographically compact capital, bordered by hills and the sea, resulting in a limited supply of properties in central locations. This scarcity is likely to sustain upward pressure on prices, as the pace of home building continues to lag behind the demands of a growing population.
We await the full impact of the new UK government on our economy and property market. In a city where one in four children attend private schools, the introduction of VAT on private school fees could influence property prices for family homes in areas with highly regarded state schools. The next Scottish Parliament election is expected in 2026, and with most property-related matters devolved to the Scottish government, it will be intriguing to see what housing policies are proposed in the run-up to the election and beyond.
This is certainly not the time to rely on an inexperienced agent who cannot adapt to changing market conditions. At Neilsons, we have navigated almost every conceivable market scenario in our over 47 years of business, and we look forward to assisting even more in 2025 and beyond.
A property that is accurately valued, professionally marketed, and effectively promoted, supported by our award-winning and highly experienced team of solicitors and property professionals, ensures your property is in the right hands to maximise market potential, regardless of the market conditions.
If you are buying, the big challenge is being able to secure the property you want to buy. This is where Neilsons can help. It is crucial to choose a Solicitor that understands the current market dynamics. Make sure you choose a Solicitor at Neilsons with not only the local experience necessary to proceed successfully, but that has the cutting edge technology to give clients the all important edge in today’s fast moving market.
Book a free consultation with Neilsons here!
