EDINBURGH’S housing market is showing initial signs of what is being described as “a return to equilibrium”, according to a leading estate agent.

Warners Solicitors and Estate Agents reported a growth of a fifth in the number of properties it has brought to the market in the first quarter of 2017 compared with the same time period in 2016 — as well as a similar year-on-year increase for March.

David Marshall, its operations director, said it was no secret that the capital’s property market had favoured sellers over the past year.

He added that demand was outstripping supply and strong growth in house prices.

“These high prices haven’t led to a rise in the number of homes coming onto the market however,” he said.

“In fact, many potential sellers over the last year have delayed putting their home onto the market until they find somewhere that they wish to buy, further fuelling the supply shortfall, leading to quicker sales and an upwards pressure being exerted on house prices.

“We are now seeing tentative signs that this phenomenon is beginning to relax as more people in the city appear ready to take the plunge and put their property onto the market.”

He added: “Although people often think of rising prices as being a good thing, the reality is that it very much depends on your situation. Downsizers in particular are likely to have benefited from market conditions over the last year, as have investors. On the other hand, conditions are naturally tough for first-time buyers who will frequently find themselves being outbid at closing dates.”

“Whilst the market still remains tilted in favour of sellers, a continuing improvement in supply would help the market to balance itself out, and in the long run could ease some of the pressure on buyers.”

In the first quarter of the year, almost 80 per cent of properties sold through Warners sold at a price exceeding their home report valuation - up from 56 per cent over the same period last year.

By contrast, less than a tenth of homes sold were bought for a price below their valuation during the first three months of 2017, well below the figure of 34 per cent a year ago.