Average price of home in Capital drops to £215,000

Some areas have seen particularly sharp drops in house prices over the past year, with a fall of 14.9 per cent in the price of two-bedroom flats in Marchmont/Bruntsfield, where the average is now 248,388.

The city centre saw a drop of 10.5 per cent for all properties, with the average now at 229,169.

The average price of a home in Edinburgh was 214,938 during the period from March to May, down 4.4 per cent from the same time last year.

The Edinburgh Solicitor's Property Centre (ESPC), which issued the figures, said the sharp drops were offsetting unusually high rises during the early part of last year.

Business analyst for ESPC, David Marshall, said: "We saw sharp rises in price in most areas during the first few months of last year and the falls we are seeing now go some way to offset these.

"Most notably in Marchmont and Bruntsfield the average price of a two-bedroom flat fell by 15 per cent this year, but this followed an anomalous 35.6 per cent rise last year. The average of 248,388 recorded over the last three months is 15.3 per cent higher than two years ago.

"Similar if less pronounced patterns were seen elsewhere in the Capital. In the city centre a 14.5 per cent annual rise in 2010 was followed by a 10.5 per cent drop this year. Meanwhile, in Stockbridge and Comely Bank a 7.4 per cent drop in the average price of a two-bedroom flat this year came on the back of a rise of 15.6 per cent at this time last year."

He said some of the volatility in figures was due to a low volume of sales, but overall he expected to see prices continuing to drop after last year's short-lived peak.

With far more properties for sale in the Capital than is usual for the time of year, buyers have been in a strong position, with only 33 per cent of fixed-price sales achieving the asking price, compared with 45 per cent during the same period last year.

Mr Marshall said: "Conditions in the market favour those looking to buy. There are around 35 per cent more properties for sale than you would normally expect to see at this time of year. Many sellers are finding they have to lower their expectations on the price their home will achieve, although obviously when it comes time for them to buy they will probably be able to spend less than they may have thought."

In the Lothians, the price trend was broadly similar to that in the Capital. West Lothian saw a 15.8 per cent year-on-year drop in 2011, but this followed a 13.8 per cent annual rise in 2010. The average price for a property in the county is now 142,978.

Midlothian saw a 7.8 per cent annual drop this year, which left the average at 160,922.

East Lothian actually saw prices rise by 7.9 per cent, bringing the average to 215,847, but Mr Marshall said this was unlikely to be prolonged and had been caused by a number of sales at the upper end of the market skewing the average.