'Offers over' house sales on the wane

Published on Tuesday 9 June 2009 10:06

ONE in every four Edinburgh homes is now being sold using the new "offers around" system, new figures reveal.

For the first time, more homes were sold in the Capital in May using the newer system, which also includes "offers in the region of", than the traditional Scottish "offers over" method.

The arrival of home reports, together with the property market slump, is said to be leading to the demise of the offers over system, which accounted for only 21 per cent of sales in May, compared to nearly two-thirds of sales in May 2008. Now, the most popular method of selling a home is fixed prices, which accounted for 55 per cent of the city's 371 house sales in May.

Fixed price sales account for a lower ratio of total sales than at any other point this year – in what property experts say is a sign of the slowing of the decline in the market in Edinburgh.

David Marshall, business analyst at the Edinburgh Solicitors Property Centre (ESPC), which compiled the data, said: "Since home reports came in, we have seen a lot more fixed price, offers in the region of or offers around because an independent valuation is part of the home report.

"If you get an independent valuation, a lot of sellers believe it makes sense to invite offers around that figure.

"Now we are basically seeing more than one in five of all properties sold being either offers over or in the region of, yet they were a very small minority – below one per cent of all sales – for most of 2008. It is a not insignificant change in terms of how property is marketed in Edinburgh."

Scott Brown, partner at estate agent Warners, said: "In a difficult economy, purchasers want clarity. It also shows them that the seller is not being greedy. They know what it's worth.

"A lot of people out there are saying that, given the state of the economy, they don't want to have a closing date battle. They might not even look at an offers over property."

However, he added that some 'offers around' properties are still leading to closing dates – suggesting that offers over might return when the market strengthens.

"It may be that when the buoyant market returns at some point, people will want offers over again, but it may be that it is offers over the home report valuation, rather than 10,000 or so under that, as we had in the past."

The ratio of fixed price sales in Edinburgh has now fallen for three consecutive months, from 67 per cent in March, to 61 per cent in April and 55 per cent in May. Leslie Deans, senior partner at Leslie Deans & Co, said: "The higher the percentage of fixed prices, the lower the public confidence level. As the number of properties at fixed prices declines, it is indicative that public confidence is going up a bit."