Median price at August 2008: £206,012

General increase since Sept 2007: 5%

Projected increase to Sept 2009: 0%-2%

Five-year increase: 43% (£80,995)

Ten-year increase: 154% (£144,126)

The complete East Lothian price guide

With even Edinburgh getting edgy this year — after a decade of belief that it was immune to national fluctuations — it was almost inevitable that East Lothian, its satellite market, would see growth tail off. Our experts predicted growth of anything up to 10% last time but, like almost everyone else, they were caught cold by the pace of change post-Northern Rock.

As J&E Shepherd’s Adrian Stott confirms: “Several estate agents have laid off staff due to the downturn and the lack of mortgage funding has really hit the market hard in East Lothian.

“The trade in one-bed flats, the traditional first-time buyers’ market, has all but stopped as purchasers now need higher deposits, joint income applications or mummy and daddy as mortgage guarantors to help their sales through. The high capital values in East Lothian also mean reduced returns for letting investors. This has a massive implication for the middle market. We have seen a lot more repossession valuations this year than in previous years.”

The high-end £1m-plus market is still pretty rarified, with limited availability in Archerfield in Dirleton and of one-off smaller developments, ensuring that prices remain buoyant in this sector. Mortgage requirements over £500,000 are generally less of a concern, but the demand in this market is historically underpinned by the Edinburgh financial sector which, of course, is going through some very difficult times at the moment. So while the top end looks stable for now (the best houses in the best coastal locations are virtually recession-proof) even here, the forecast is murky.

Stott says: “While I have seen no hard evidence of actual prices falling — for that we would need to see the same house sell for less than it was bought for this time last year — the media do not help. And Nationwide’s claim that the average house price has fallen by £15,000 is a meaningless statistic.”

Last year, Liz Craigie of Lindsays spelled out East Lothian’s universal appeal: commutability, low building density, golf, good schools and coastal scenery. The temperate climate that supports the so-called bread-basket of Scotland is a factor too, showing off houses and gardens to their best advantage and supporting outdoor family living. No amount of negative press, you’d assume, will be able to diminish the appeal of East Lothian as a lifestyle proposition and, as such, though prices could stagnate, we are not predicting any falls.

In 2006, at the peak of the boom, our agents predicted that, as in Edinburgh, the £2m price tag could become the norm in the top 5% of sales in East Lothian. Despite the sale of Seton Castle for £5m to Stephen Leach, the internet entrepreneur — two years after it was offered for sale at a jaw-dropping £15m — the reality is that the £2m ceiling has not quite materialised as a common-place occurrence.

Away from the property of the well-heeled top 5%, we believe that until such time as inter-bank lending resumes at sensible levels and mortgage funding eases, the market in East Lothian will stutter along. However, as builders close down sites, bank land and downscale their plans, there may be increased demand for second-hand new homes, as there are still people who have to move for work or personal reasons and would prefer a modern home on an established estate.

Times recommends

• Second homes: credit crunch casualty or money-spinner?
• How I built my own sliding house
• Top 10 incentives for house buyers