Home transactions will drop by around 15% over the course of the year, with average house prices set to fall back by around 5%, according to estate agent Rettie & Co.

Its summer briefing shows Scottish housing sales were down 10% in the first five months of 2023 against the previous year, with the rate of house price rises also falling.  Steeper adjustments are expected over the course of 2023 as interest rate rises take effect. 

However, the value of properties being listed is broadly comparable with last year, although sales will take longer in the slowing market. 

Over the last three months, the supply of new properties coming to the market in Edinburgh is approximately 10% higher than the same period last year, while, in Glasgow, supply has followed the downward trend in registered sales, falling back by approximately 14%year-on-year. 

The average cost of a mortgage on a Scottish property is now higher than the average rent.

John Boyle, the firm’s director of research and strategy said: “When you add rising interest and mortgage rates to slower or negative house price growth, the picture is far from rosy for households in Scotland.

“However, the market is continuing to function even if at a slower pace. On the rental side, the reduction in supply combined with increased demand, set against an unhelpful legislative environment, is seeing a steep rise in advertised rents and a lack of availability.”