Affordability is reason for slowdown in Edinburgh

There are signs that the housing market in Edinburgh is slowing. The latest figures show that in the first six months of this year the average time a property was on the market has risen by 251 per cent from 138 to 485 days resulting in a 26 per cent rise in the number of homes advertised for sale.

There have been 218 homes put on the market in the last fortnight alone.

By comparison, in Glasgow the average time a property is on the market has only risen by 1 per cent from 111 to 112 days and the number of homes advertised for sale has increased by 18 per cent in the first half of 2025.

There will be a number of factors, but affordability must be at least a major part of this slowdown.

The average asking price in Edinburgh is £415,252 while in Glasgow it is £249,663. Needing an extra £165,000 is quite a big difference and the rising prices in the capital must, at some point, make homebuying less affordable for many more people.

That’s not to say that this is a gloomy situation. On the contrary the market will always adjust to demand. The higher the price the fewer people can afford to buy, and a stabilising of prices will occur.

But there is no doubt that Edinburgh remains an attractive destination for a growing number of people. Its population increased by 8.4 per cent in the decade to 2023 which is more than double the Scottish average of 3.2 per cent over the same period. In the previous decade from 2003 to 2013 the population also increased by 8.4 per cent and it is forecast that a further 60,000 people will come to live in the capital by 2043.

The need for housing is, and will continue to be, very high so that demand, while it may be slowing in the short term, will undoubtedly rebound in the coming years as the population grows.

A further advantage Edinburgh has is that it is attracting well-educated, well-paid people which will inevitably result in an increase in demand for quality housing.

While the current stabilising of house prices may cause some concern to people who are selling it is likely to be welcomed by many buyers. In particular, first-time buyers who have seen a 4.7 per cent increase in the average price of an Edinburgh home over the last year compared to a rise of 2.2 per cent for the whole of Scotland.

As ever, with the property market, stability is essential. Enormous price rises are rarely a sign of a steady and secure market. It is much better to have annual growth of 2-3 per cent than 6 per cent one year and 1 per cent the next.

The Edinburgh City plan 2030 commits the council to developing sites to create a further 40,000 homes in the capital up until 2034 in order to sustain growth and provide appropriate housing for the population.

This is undoubtedly ambitious but at least indicates that the council is adopting a sensible and ambitious approach to enabling economic growth in Edinburgh. There is little doubt, therefore, that while house prices may rise more slowly in the coming year Edinburgh has a rich future as a destination and for people to live and work and – notwithstanding this temporary blip - it will certainly see house prices rise in the near future.