FIRST-time buyers in Scotland struggling to take their first step on the property ladder could shift their focus to fixed-priced homes.
An expert at international real estate advisors Savills, associate director Jennifer Goldie, believes purchasers in Scotland are often priced out of a potential move by the requirement for a so-called’ double deposit’. Unlike the rest of the UK, in Scotland, mortgage providers will only lend based on the Home Report value, not the agreed sale price.
With the current market trend meaning buyers most likely need to pay a significant sum over and above the Home Report price to secure a property – latest figures suggest at least an extra 10% – they are in effect having to splash out on a second deposit if they want to meet the seller’s valuation.
As first-time buyers won’t have the luxury of funds from a previous sale, many of them are being shut out from the market.
However, one way to avoid the double-deposit dilemma is for buyers to target fixed priced homes. That’s because if the seller is advertising the property at a price below or equal to the home report value, a potential bidding war is avoided, and the purchaser won’t have to stump up that substantial second financial outlay.
Apartments at the impressive New Steiner site in Glasgow have recently come to market on a fixed priced basis, presenting a potential entry route for first-time homeowners.
The stunning redevelopment of the former B-listed Steiner School is set within the city’s Finnieston district, recently dubbed one of the UK’s ‘coolest neighbourhoods’ by The Telegraph, and offers apartments starting at £299,995. Each of the homes are set at a fixed price, with just a £2,000 reservation fee required to purchase, therefore preventing the financial agony that can be brought by the ‘offers over’ buying process.
Commenting on the increase in enquiries for fixed-priced homes, Savills associate director, Jennifer Goldie, said: “The Scottish property market has always operated independently from the rest of the UK, and this has certainly brought both positives and negatives for buyers and sellers over the years.
“What we have been witnessing since the impact of the pandemic is an increased struggle for first-time buyers to be able to take that first step on the property ladder. With a spike in prices, caused by a huge spike in demand, that’s led to sale prices often being agreed at a significant figure over the Home Report value.
“With the purchaser having to pay the difference out of their own pocket and not being able to lean on their lender for this amount, lots of people aiming to buy property for the first-time are simply being priced out of the market.
“For these buyers, fixed priced new homes can be the answer. Although fixed-price properties still only represent a small percentage of the resale market all our new build homes are currently sold at a fixed price which is an attractive benefit for anyone struggling to purchase a property.”
Last month, Nationwide Building Society figures showed average UK house prices had suffered their biggest fall in over a decade, with a 1.1% decrease in the year to February.
However, many parts of Scotland buck this trend, including Glasgow, where the market has remained more buoyant, continuing to show growth since the pandemic spike took hold in 2020.
Of the 20 two-bedroom apartments, 14 garden duplexes and 2 exclusive penthouses at the New Steiner development, over 60% have already been sold as interest remains high, particularly from the international market.
As Jennifer Goldie explains: “The Scottish residential market so far this year has remained resilient, with the number of agreed sales during the first two months 11% higher compared to the same months before the pandemic between 2017 and 2019.
“This is being sustained in part due to overseas demand, with purchasers from the likes of Portugal, Greece and Singapore, having already secured properties at the New Steiner, with several other nationalities having shown interest.
“That’s because there’s still good value in the likes of Glasgow for the price, whereby you’re getting a spacious, high-quality property in a premium location, at a far more reasonable cost than you would find in the likes of London.”
Another appeal for first-time buyers is the ‘move-in-ready’ home, particularly when costs are tight. Often with some new builds, the purchase price won’t include all the specification as standard, with some items being hidden upgrade costs, meaning yet another lump sum having to be saved to make the property complete.
At the New Steiner development a fully interior designed specification package is pre-selected and installed so when the contracts are signed, the new homeowner can move within the space of a couple of weeks and begin living in the property straight-away removing an often onerous step in the property purchasing process.
Jennifer Goldie said: “We’re seeing a huge demand at New Steiner because it’s not often you see a brand new development come to the market fully complete and ready to move into immediately.
“Apartments at New Steiner have their full suite of high-spec interiors, including luxury Poggenpohl kitchens and contemporary bathrooms carefully designed by West One Bathrooms London. It’s already a fully liveable space, with no requirement to look out the toolbox or part with any more of your savings to bring your new home up to scratch.
“Particularly with young professionals, they have busy lives and perhaps not a great deal of disposable income to start renovating a property, therefore the demand for ready-to-move-in properties like the ones at New Steiner is a trend we’re likely to see continue over the next decade.”
To find out more about the New Steiner development and the properties for sale, you can visit the New Steiner website here.
