Slump in homes to buy, says city estate agent
CAPITAL home buyers are struggling against a crippling lack of property on the market, according to a new report by a city estate agent.
New findings have shown a dramatic fall in the number of houses for sale in Edinburgh, dropping by 50 per cent compared to the usual average.
And the Warners report describes a “vicious cycle” whereby prospective sellers are holding onto property until they have been able to find somewhere else, leaving potential buyers in limbo with little on offer.
David Marshall, operations director at Warners, revealed it was those looking to get on the property ladder who were being hit the hardest by market conditions, though added it was a “great climate” for sellers.
He 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.”
David continued: “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.”
The report also revealed buyers were now having to make their “best offer” for sale properties, often paying well above the home report valuation.
According to the study, sellers achieved an average price of around six per cent over the value of the home on recent estimates.
Mr Marshall added: “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.
Maria Botha-Lopez, business analyst for Capital property firm ESPC, added increased interest rates may help steady the market.
She said: “While affordability continues to put stress on first-time buyers in the market, the shortage of homes impacts all buyers and prospective sellers looking to buy their next property.”
“This shortage and demand typically pushes selling prices up, while less choice makes prospective sellers reluctant to list their own property.”
She continued: “Historically low interest rates and mortgage availability strengthens demand, so a potential gradual increase in rates might ease some of that demand.”