House prices across Scotland are likely to level out in 2009 as falling interest rates and better mortgage deals create the ideal conditions for first-time buyers, according to a group of the country’s leading property solicitors.

The ELPG group, which is made up of Warners, Neilsons, Leslie Deans & Co, Drummond Miller and the Lints Partnership, believes that house prices will reach their lowest figure in the early months of 2009 before they level out – prompting buyers to quickly enter the market before prices start to recover.

The group, which accounts for around 25% of property sales in Edinburgh, said consecutive cuts in the base interest rate and the continuing freeze on Stamp Duty on properties up to £175,000 has created favourable conditions for first-time buyers to make their first step on the ladder.

-- Advertisement --

And they predict that banks and lenders will start offering better mortgage deals within the coming year, which will encourage more buyers into the market.

Les Deans, senior partner with ELPG firm Leslie Deans & Co, said: "I think we are starting to see house prices level out now, which is a positive sign for the property market. I don't believe prices in Scotland - and Edinburgh in particular - will continue to fall dramatically and this will encourage buyers to make a purchase.

"At the moment, there are still many people who are waiting for the market to fall even lower before they buy a property. They're seeing interest rates and house prices continuing to fall and they think that they will get a better deal if they hold on."

Mr Deans believes this is the best time for first-time buyers to get on the market. "We're already seeing property investors enter the Edinburgh market, which is a sign that we're nearing the bottom in terms of prices, so I do not believe buyers will benefit from waiting.

"After a few months at the bottom of the curve, we’ll start to see more properties being sold and - ultimately - prices starting to recover as people begin to realise that they won't get a better deal by waiting to buy," he said.

(GK/JM)