Median price at August 2008: £179,086

General increase since Sept 2007: 2%

Projected increase to Sept 2009: 0-2%

Five-year increase: 98% (£90,459)

Ten-year increase: 168% (£66,907)

The complete Borders price guide

As views on what constitutes a realistic daily commute have expanded, the Scottish Borders has seen average prices almost double in the past five years and rise by 168% since 1998, according to HBOS.

However, just as slower market conditions inevitably affect all but the most tried and tested period homes, they also hit the so-called warm spots — areas benefiting from the ripple effect of rising prices in nearby hot spots. Although towns such as Melrose continue to perform well, activity generated by Edinburgh commuters has been negligible this year and the Borders has reverted, for the most part, to its previous status as a local market with a localised focus.

Alex Inglis, of agent John Sale, confirms that, as always, the Borders’ characterful country houses continue to sell well, but elsewhere business has slowed to a trickle in comparison with its 2006 peak. He says sales volumes may have fallen by as much as 50% this year, although homes that do sell are mostly keeping their projected values.

In a part of the world where the high earners constitute public-sector and health workers, tradespeople and teachers, the lack of liquidity in the mortgage market is becoming a massive issue.

Inglis says: “With most lenders offering 85% mortgages, the raising of a large deposit is proving the big stumbling block for first-time buyers and those looking to trade up. It is frustrating, as the demand is clearly still there.”

After a good first three months of the year, agents were caught by the sudden market turn in late spring. With buyers and sellers playing a waiting game, the road ahead remains unclear.

“There is definitely a lack of confidence,” says Inglis. “We have seen offers made subject to buyers selling their own property and also deals failing to conclude because buyers can’t raise the capital or sell their existing home.”

With many homes now taking months to sell, the introduction of time-sensitive home reports later this year will be an unwelcome additional expense for sellers.

However, if you want a country cottage bolthole or larger rural Borders property, now could be the time to look for a forced sale. Owners of traditional homes in Peebles and Melrose are probably most immune to the vagaries of today’s marketplace. These homes are perennially popular, scarce and holding their prices well but Inglis says buyers should avoid large, expensive new-builds until the market settles down.

He says: “There are some tempting-looking, particularly part-exchange, deals for new homes around but they are hard to evaluate at the moment.

“Buy-to-let appears to be a decent proposition still — but only for landlords with an existing portfolio.”

Times recommends

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