Return to offers over system boosts property market

Senior News Reporter

Friday 8 March 2013

It is a long-held quirk of the Scottish property market that largely evaporated following the credit crunch.

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Alison Campsie

Now a return to an "offers over" selling is being cited as key to speeding up market recovery by stimulating interest amongbuyers, creating competition and stoking up that all-important emotional attachment to a prospective new home.

Following research, estate agents Savills said that owners of prime property worth £400,000 over more should drop their asking prices by 10% in a bid to trigger activity at a time when supply continues to outstrip demand.This comes on the back of higher-end property values dipping some 20% since the credit crunch in 2008. Savills said that higher value homes in Scotland were taking an average of 219 days to sell – an over-lengthy period which can create stress and frustration.While dropping the asking price may seem a daunting prospect to those looking to downsize, Andrew Perratt, head of residential in Scotland, claimed such a reduction would not necessarily translate into homeowners selling properties for less.He cited the case of four prime property sales in Glasgow completed shortly after the closing date after owners dropped the asking price.He said: "We are not suggesting prices need to fall by 10%, what we are saying is that asking prices need to fall by 10%."The average selling price is 219 days, which is slightly better than it was last year, but too long for anyone's standards."If we look back, the average price paid in prime market was around 9.4% below the original asking price and over half the properties last year had a price reduction at some point."Savills said the traditional approach of looking at historic sales in the street, or local area, is now of much less relevance given that sales data has become so quickly out of date.Mr Perratt added: "Scotland has always had an offers over system and we lost that due to the recession. We are now seeing a return to that system, if properties are priced appropriately"We are trying to stimulate interest at a time when there has not been a great deal of urgency among buyers. l Sales of £1 million homes have fallen slightly in Scotland, down from 139 to 125, although Edinburgh continues to account for just under half the houses changing hands in this price bracket.

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Return to offers over system boosts property market

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