The residential property market may not be the first place you look for fashions and trends, but they apply here as much as anywhere.
In Edinburgh and the Lothians, in the past couple of years, we have seen an increasing number of purchases being ‘subject to sale’. This involves a buyer placing a condition that they must sell their own property before the transaction can conclude.
The strategy is most common amongst families and downsizers, who generally want to move but do not have to move and for whom a purchase only works if there is also a sale.
A market blocked up
The ‘subject to sale’ trend is strong in Edinburgh because of market uncertainty about supply. Owners are wary of selling their current property because they are nervous about being unable to buy a suitable replacement property from the limited options available.
This is a vicious circle that is gumming up the market, particularly for second- and third-time buyers. So, how can buyers, sellers and estate agents help to unlock the market?
At Lindsays we see the possibility of a new clause entering the tactical toolkit: a sale ‘subject to purchase’. This would be a case of a seller – most likely a downsizer or a family – listing their property and securing a sale conditional on them making a successful purchase.
A market unlocked
When people know they have the safety net of being able to withdraw from the sale if they are unable to find a suitable property to buy, they will inevitably be more relaxed about selling. If others behave in the same way, the vicious circle becomes a virtuous circle.
This solution will not be for everyone, and we will still see plenty of sales and purchases unlinked to another transaction. But for this particular section of the market, stuck by a lack of supply, ‘subject to purchase’ could be the key to unlock the door.
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