Edinburgh Buyers Caught in “Vicious Circle” of Home Shortages
Friday, June 22nd, 2018
on behalf of Warners Solicitors and Estate Agents
CAPITAL buyers are being caught in a “vicious circle” caused by property shortages, according to leading experts.
New findings from Warners Solicitors & Estate Agents show that buyers are delaying putting their own property up for sale until they can find a suitable property to buy, leading to a staggering 50% drop in the number of homes available for sale in Edinburgh.
The lack of properties coming onto the market means that those homes that are for sale are often attracting two or more notes of interest allowing sellers to set closing dates for their properties.
As a result, buyers are encouraged to submit their best offer, allowing sellers to achieve prices often well in excess of the initial valuation figure – with the average property achieving 6% over their Home Report valuation.
David Marshall, Operations Director with Warners, said: “For some time now there simply have not been enough homes for sale in many areas of Edinburgh to keep pace with demand.
“This is great news if you are looking to sell a property of course, but for buyers the market is incredibly challenging.
“Of course most of us look to buy and sell at the same time meaning that these figures represent mixed news for the majority of people.
“On the sales side you may well receive a higher offer than you expected for your current property but, when it comes time to buy, the chances are that you will probably have to bid more than you anticipated to secure your next home.”
Despite the state of the current market affecting buyers in general, those looking to get on the property ladder are being hit hardest by the lack of homes.
With properties exceeding their Home Report value, first-time buyers are having to invest larger sums, or rely more heavily on the bank of mum and dad, to compete.
David added: “At present the market is toughest for those looking to secure their first property. Most lenders are only willing to lend up to the Home Report valuation of a figure.
“If you want to offer any more than the valuation figure you will need to have this money available in addition to your deposit.
“Most first-time buyers don’t have the cash available to allow them to do this, making it very hard for people to get on the property ladder.
“As we come into the summer months, the market is likely to quieten a little, but the reality is that the market is less seasonal than was once the case.
“There will be a slight drop in the number of properties selling, but equally the number of homes coming onto the market will be lower than we saw during the spring period.
“As a result, the balance between supply and demand will be broadly unchanged meaning that sellers will continue to hold sway in the market.”
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