Figures released earlier this month by the ESPC reveal that the average house price in Edinburgh now stands at £192,225 following a 11.4% year-on-year fall in October.
It is the third consecutive month which has seen a fall in the year-on-year prices, with the rate of decrease up from 7.1% in September.
The figures revealed that buyers were continuing to take advantage of their improved bargaining position in the current market by negotiating lower prices with sellers. More than 75% of properties advertised at Fixed Price sold for less than the asking price compared with 40% in October 2007.
Buyers were also having to pay lower premiums to purchase properties marketed at Offers Over. The average premium paid in October 2008 in the Capital stood at just under 13.8% compared with almost 26.7% a year ago.
Ron Smith, Chief Executive of the ESPC, blamed an potential buyers have experienced in securing financing for house purchases and low consumer confidence.
"Naturally, this makes things tougher for sellers, however the majority will also be looking to buy once they have secured a sale so they can look to balance any drop in the value of their current property by making savings on their new home," he suggested.
The number of properties brought to the market for sale fell by 54.9% and the number of completed sales in October was down by almost 60% annually for the fourth consecutive month.
Just less than 400 sales were completed in the last month compared with over 900 during the same period in 2007.
November rate cut
Responding to the Bank of England's surprise decision to drop interest rates by 1.5% Lesley Canavan of ESPC Money Management cautioned home sellers not to expect this to signal a swift return to rapid house price inflation.
"This cut will only benefit homeowners and first-time buyers if lenders pass the cut onto high street interest rates, and we would hope that this would happen as swiftly as possible. A return to the levels of cheap credit available in recent years would not be desirable of course, but hopefully as we move forward we will get to a situation where we have responsible, moderate lending that ultimately allows the market to grow at sustainable levels."