Homebuyers are resorting to extreme measures to secure purchases in the current frenetic Scottish property market, paying hundreds of thousands of pounds in cash, camping overnight outside estate agents’ offices and even buying flats and houses without viewing them.
Changing priorities, a post-lockdown rush to buy and a shortage of available housing stock have combined to create the most frantic rush for homes in a generation.
With buyers in Edinburgh and Glasgow routinely paying more than £100,000 over the Home Report value for mid-range properties, competition has never been fiercer.
Struan Douglas, managing director of Edinburgh-based Solicitors and Estate Agents Purdie & Co said record low interest rates have created unprecedented levels of borrowing, but with too few homes on the market, buying power is no longer enough to secure a purchase.
With dozens of people often chasing a single property and prepared to pay the same amount, other factors are coming into play.
He said: “At the moment cash is king so sellers are not necessarily opting for the highest bid. Many are opting to sell to the bidder with the cleanest offer, that is, where the means to buy is the least encumbered.
“So, if you can’t buy the property outright from your own funds, and you haven’t yet sold your home, you will be further down the pecking order.”
According to Mr Douglas, changes to working arrangements caused by the pandemic has seen a rush of expat professionals returning to Scotland from south of the border and overseas, many with cash to burn.
He said: “People working from home in a two-bedroom flat in central London have realised that they can get a four or five-bedroom family home in Edinburgh or Glasgow for the same price, often with no mortgage.”
“Many of those who sell up have enough equity in their London properties to buy in cash north of the border – they can literally hand over a cheque for eight or none hundred thousand pounds and move in.
“Some are so determined to secure a home that they will bid 30% over the Home Report value as soon as a property is posted for sale online without viewing it first, in the hope that they can persuade the seller to take it off the market.”
House prices in Scotland increased by almost 11% in the past year with Edinburgh remaining the country’s hotspot for the most valuable properties.
Latest figures published by the Registers of Scotland show that property inflation was almost double that south of the border over the past 12 months with house prices approaching the UK national average.
Pent-up demand after successive lockdowns helped to fuel the highest price inflation for almost a decade and a half.
The number of transactions in the first three months of the year was up by nearly half on the start of last year.
James Lang, a partner with Glasgow-based Corum, said newbuild developments are selling out entirely while they are still plots in the ground.
He said: “Buyers are normally able to reserve a plot when the homes go on sale, but demand is so high that developers are having to offer them on a first-come-first-served basis.
“As a result, we are seeing people prepared to camp-out overnight outside estate agency branches and developers’ cabins to ensure they are first in the queue when the doors open at 9am.”
He added: “As well as Scots returning from inner city London, Birmingham, Manchester and Coventry, we are also seeing expats come home after working overseas for several years, particularly from Gulf states such as Oman and the United Arab Emirates.
“With many now able to do the same job from home, they are reviewing their priorities and realising they would rather be around friends and family.
“Having been locked down in air-conditioned apartments with temperatures of 45 degrees outside, a lot have cancelled projects or cut them short to return to Scotland.”