Buying Scottish Property

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by Brian Turner

Scotland has increasingly become a favoured location for people across the rest of the UK looking to escape England’s suburban sprawls.

What makes Scotland additionally attractive is that house prices are traditionally lower than England, with new built four-bedroom homes readily available from £175,000.

There are a few simple issues that can trip up the unwary buyer to Scottish property, though.

Offers Over vs Fixed Price

Scotland uses a different system of property purchasing than England and Wales. While the rest of the UK overwhelmingly states the fixed price for property, Scotland uniquely uses an “offers over” system.

The setting of an offers over price varies with market conditions, but traditionally the property seller will list the property on the market, commonly expecting somewhere in the region of 10%-20% over the asking “offers over” price.

However, it’s a bidding system, and the seller can consider all offers without commitment - usually opting for the highest offer.

This effectively turns buying a house asking for “offers over” into a potential bidding war, something that works very much in the favour of buyers, but not necessarily in the interests of property buyers.

This is especially the case with traditional Highland properties, which are very sought after, and it is not unknown for English buyers especially to overbid for properties asking for offers, helping push on house price inflation.

It’s certainly no coincidence that the Scottish property market has not suffered the same issues of negative equity and property deflation that has affected England over the past few decades.

Something to keep a keen eye on is that when the Scottish property market slows, and homes are harder to sell, the offers over system starts to give way to fixed price sales - which are first come first served.

So do look out to see whether properties in the area you are exploring are primarily offers offer, or whether there’s a strong number of fixed price sales, to get an idea of the property market in your targeted area. If there are a number of fixed priced properties in the area, then you could find the actual selling price of offers property to be as low as 5% of the offers over price.

You should be advised of the state of local property market conditions by your representative solicitor.

Solicitors vs Estate Agents

Scotland has its own legal system which is distinct to England & Wales. While there are Estate Agencies in Scotland, the majority of property purchases are conducted through Scottish solicitors, who often have a dedicated department for property sales and purchases.

Unlike Estate Agents, who can charge a percentage fee on the sale value of the property, solicitors usually charge a fixed fee based on various legal costs.

If you do seek to buy a property, you will need representation from a Scottish solicitor to forward a formal offer for you. And unlike England & Wales, once this offer is formally accepted by the selling solicitor, the sale is binding and you should not expect to face gazumping.

For this reason, you should ensure that any offer is serious because you will be held legally liable for it.

Scotland and property chains

Property chains are very much frowned upon across Scotland. It is common for selling solicitors to refuse to accept an offer on a property unless the buyer already has the funds available for a purchase, not least from already having an offer accepted to buy their property - the funds of which will be made for the purchase.

For that reason it is especially important to be aware of Highland property markets, but refrain from making an offer unless you can guarantee a sale.

This is especially the case in “offers over” sales. If your bid is dependent upon a property chain for selling your property to make a sale, then expect the seller to reject your offer.

Similar applies for fixed price properties. While it may work on a first-come first-served basis, you should avoid placing an offer for a fixed-price property until you have available funds for a purchase.

Because once you make that offer, and the sales process gets under way, if you find yourself still bound by a property chain, you will also find yourself bound to the new purchase. The result is that the unwary buyer could find themselves paying mortgages on both the new and their original property until the chain is completed.

Scottish Solicitors Property Centres

As with England & Wales, there is no central database of all properties available.

However, many Scottish solicitors pool their property portfolios into central guides for specific areas.

While these do not comprehensively cover all available property in any particular area, they are generally likely to cover at least 80% of the available property for sale.

However, do look out for large and small independent estate agency chains, who can provide a much more comprehensive picture in conjunction with the main Scottish Solicitors Centres.

Main Scottish Solicitors Property Centre areas:

• ASPC: Aberdeen Solicitors Property Centre
• DGSPC: Dumfries & Galloway Solicitors Property Centre
• ESPC: Edinburgh Solicitors Property Centre
• GSPC: Glasgow Solicitors Property Centre
• HSPC: Highland Solicitors Property Centre
• SPC Moray: Moray Solicitors Property Centre
• PSPC: Perthshire Solicitors Property Centre
• TSPC: Tayside Solicitors Property Centre