One of Scotland's leading estate agents, Edinburgh-based Stewart Saunders, has closed and blamed a dramatic slowdown in the housing market for its downfall.

Formed in 1976 and based in Frederick Street in the centre of Edinburgh, Stewart Saunders had become a leading player in the estate agency sector with a substantial portfolio of clients in the east of Scotland.

However, it said business has been badly hit by a contraction in the housing market, with sales and income down significantly during the last year, and increasingly so in the last several months.

The owners had appointed Tom MacLennan, of Tenon Recovery, to manage the closure of the business.

Today he said: "The closure of such a respected brand as Stewart Saunders is a clear indication that the housing market is in some difficulty.

"The much-documented credit crunch and rapid tightening of lending criteria by mortgage companies has clearly affected consumer confidence and sales.

"Estate agents across Scotland will be concerned by this closure."

Mr MacLennan added: "Unfortunately the closure of the business has resulted in all 10 staff being made redundant with immediate effect.

"My team and I will try to assist them as much as possible during this difficult period. We are also working quickly to transfer all the clients to other estate agencies, and hope to complete that process by the end of the week."

Last week Nationwide, the country's largest building society, forecast house prices would fall this year.

Property market experts say the increasingly difficult mortgage market is likely to continue to push down prices for a few months yet.