Scotland’s housing market retreated a little in July due to ongoing headwinds from higher interest rates and cost-of-living pressures, according to the latest research from Walker Fraser Steele.

The average property price edged down by £900, or -0.4%, bringing to an end the pattern of small monthly increases seen in previous months.

Scotland’s average house price now stands a little above £223,000, still the third-highest month on record.

Walker Fraser Steele regional development director Scott Jack  comments: “With the end of interest rates rises perhaps in sight, we may yet see better news in the coming months for house price growth.

“But for now, the picture in July is less rosy as the housing market contracted due to the persistent challenges from rising interest rates, cost of living increases, and affordability pressures.

He adds: “All of these are conspiring to take the wind out of prospective buyers’ sails – not least new buyers who are particularly impacted by affordability challenges. However, with the announcement of the first sub-5% fixed rate mortgage in mid-September, we hope to see transactions increase and confidence to return to the market towards the end of the year”.