Property: ‘Don’t be afraid to go in with a slightly lower offer’

LAST year was another challenging one for the property market in Scotland. Against a backdrop of tough economic conditions and tight lending criteria, home sales remained well below pre-credit crunch levels and the average house price in most areas came back down to 2009 levels.

In some areas prices fell to their lowest level for several years.

The strong likelihood is that we’ll see more of the same in 2012. The number of sales may pick up slightly but prices are likely to remain broadly unchanged or inch down slightly. The factors constraining demand just now – large deposit requirements, high unemployment, low earnings growth and poor consumer confidence – aren’t likely to improve significantly in the coming 12 months.

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On the other hand the bank rate should remain low, which will reduce pressure on many sellers to accept lower offers and make sharper falls in price unlikely.

Conditions will continue to be toughest for those selling smaller properties. The number of first-time buyers who have large enough deposits to get access to the better mortgage deals remains low, and while there was a modest increase in activity among buy-to-let investors, it remains well below levels prior to the credit crisis.

The market for family homes is likely to fare comparatively well. Buyers of these properties tend to have fewer difficulties securing a mortgage, and although activity is below what you would expect to see in “normal” market conditions demand is definitely better than it is towards the lower end of the market.

If you’re looking to buy, the best advice is to use market conditions to your advantage because the balance of power is very much in your favour. Once you find somewhere, don’t be afraid to go in with a slightly lower offer. Most homes are selling for less than home report valuation, and even if your initial offer isn’t accepted it might at least provide a starting for negotiations.

For sellers it’s vital to do everything you can to make your home stand out. Making sure you have all the marketing angles covered and highlighting anything that helps your home seem unique is crucial in getting buyers’ attention. Selling before you buy is still the sage advice, but it pays to have a look at what’s on the market early in the process to give you a better idea of how much you’ll have to spend on your next home.

David Marshall is head of business development at Edinburgh Solicitors’ Property Centre