2005-07-30

Money: Fixed prices & Rural First-Time Buyers

One in five Scots favours scrapping the property market's 'offers over' system, according to a survey which reveals the number of buyers willing to pay 'over the odds' for houses has plummeted. Those against Scotland's system fear it will result in their paying too much for a home. The number of property-seekers willing to pay any more than 10 per cent above the offers-over price has dropped from 32 per cent to 14 per cent in a year, according to 'The Clydesdale Bank' research. Some 19 per cent of Scots want the trend for fixed-price sales to become the norm. Mr.Steve Reid, of 'The Clydesdale Bank', sees Scots treading cautiously in the housing market, though interest rates are tipped to fall.
'Scotland has enjoyed continued growth in house prices in recent months, although there are signs this is slowing,' he said. 'This probably has as much to do with limits being reached on what people are able to pay as concerns around price levels themselves. 'Our average mortgage size is around 60_000_GBP -- significantly up on last year 2004. Some people probably feel a switch to fixed prices will help them avoid a temptation to offer too much.'
The recent caution by Scots buyers comes amid wider uncertainty in the property market across Britain. One in six of those surveyed believed the fluctuating market in England & Wales had an impact on buyers in Scotland. And one in five feels it unfair they will not benefit from The Chancellor of the Exchequer's shared equity scheme, which will make it easier for thousands in England to get on the property ladder. 'The Scottish Executive' has promised a 'Homestake' scheme designed to aid low-income families buying a home. Mr.Reid added:
'First-time buyers are essential for a healthy housing market, and even though the government's scheme won't help buyers here, some will benefit from what the Scottish Executive is doing. The scheme benefits those on low incomes who face the hardest challenge to buy a first home.'
More than 400 people were questioned last month for 'The Clydesdale Bank' survey. Another study yesterday (2005-07-29) found first-time buyers are being priced out of the countryside after a surge in the number of rural second homes. First-time buyers have steadily declined from 31 per cent of the total number of housing transactions in Scottish rural areas in 1994 to only 26 per cent in 2004, according to 'The Halifax'. But the problem is more acute in England & Wales, where first-time buyers declined from 27 per cent to 16 per cent of the total all housing transactions. East Lothian has the lowest proportion of first-time buyers in rural Scotland (17 per cent) followed by Aberdeenshire (22 per cent), Perth and Kinross and the Highlands (23 per cent). According to 'The Halifax', the average rural house price in Britain rose by 171 per cent over ten years to 231_053_GBP in 2004, compared with a 166 per cent rise to 197_051_GBP in urban areas. 'The Halifax' Chief Economist Mr.Martin Ellis, said the number of rural first-time buyers was in a 'serious decline', likely to threaten the 'fabric' of local communities and would change the make-up of the traditional rural community. A surge in the number of second homes and a smaller amount of social housing in rural areas contributed to the trend. The survey, the first of its kind by 'The Halifax', showed the least affordable rural area was North Cornwall, where the average house price was 217_276_GBP. 'Buyers at home with 'fixed price'', Alastair Jamieson, The Scotsman, 2005-07-30 Sa

2 Comments:

Blogger Dave said...

In my opinion the Scottish System has always been nuts; in what other marketplace would you see a pricetag and offer MORE?

AFAIK, bartering tends to follow the following pattern: you ask the price, the reply is (say) 20. You offer 10, and the price is changed to 18, so you offer 12, and the deal is struck at 15.

In Scottish house-buying -- which is unique -- you ask the price, the reply is (say) 20. You offer 25. If there is a lot of offers, a secret meeting is held, and the highest 'offers over' figure wins!

What on earth is the point of even putting a price-tag on a property if it bears no relation to the acceptance?

Fixed Price is simpler, and is a first-in-first-win system. Bang wallop, the deal's done. Simple.

Failing that, the Scots could easily adopt the system in England & Wales (and other countries) -- where the advertised price is the top figure, and offers come in below that.

If neither of these satisy the greed impulse, then what's wrong with a good-old barter, as described above, or even an out-and-out auction?

Please, anything but this present silly situation!

7/31/2005 12:05:00 am  
Anonymous Anonymous said...

You are kidding, right? Offers Over is insane, can this be legal?

7/31/2005 12:05:00 am  

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