House prices in Edinburgh have fallen for the first time in nearly 40 years, property experts said.

House prices in Edinburgh have fallen for the first time in nearly 40 years, property experts said.

A market review by the Edinburgh Solicitors Property Centre (ESPC) revealed an annual fall of 6.5%, taking the average price of homes in the Scottish capital to £201,517.

This was the first fall in prices since 1971. The survey also found only 400 sales were completed in August - a 60% drop compared with the same month in 2007.

ESPC chief executive Ron Smith said the slowdown in sales had led to an increase in the number of properties in the city which were on the market.

The survey found the rise in the number of properties and tighter lending criteria had left buyers in a stronger position to negotiate lower prices.

It also revealed the average premium paid over the asking price on properties had fallen to 14.3%, compared with 27% in August last year.

Gareth Bogie, from Edinburgh solicitors Allingham and Co, said the 60% drop in the volume of sales was "frightening".

He said: "The market can cope with the drop in price - that will adjust itself to market conditions.

"But it is the volume of sales that is very concerning. This is a real wake-up call.

"People in Edinburgh thought they were in a protected market, but this shows that they're not immune from market conditions."