Home Report..mortgage amount..Scotland

[Mopani]

If a Home Report value is placed at say £200 000, with the asking price offers over £195000, can I put in an offer over the Home Report or will the mortgage lender turn this down as its more than the value of the house?Everyone is selling within a few days here and trying to work out what offer is likely to be accepted by the mortgage lender as well as the seller. Anyone in Scotland bought or sold recently who could advise?

As I understand it you can offer over the home report value (most people will depending on the market) but you can only get a mortgage up to that valuation.
So for that property if you bid £210k you'd need that additional £10k in cash.
If £200k is your max budget then you need to be looking at properties on with a lower offers over price - probably £175k.
If the market is moving fast then I would guess people are offering over the valuation price, particularly if it goes to a sealed bids closing date. Houses near me were going for up to 20% more than the valuation price last year!

Pp is completely right... if you offer over home report value you will have to find the cash. If you are on an 80% LTV then you will only get 80% of the home report value or 80% of agreed price, whichever is LOWER.

Offers over though often doesn't mean anything. Up North everything still says offers over but it pretty much means Fixed price and you still can offer under. Your solicitor should be able to advise the going rate in the area. When I bought mine 4 years ago they were generally going at 5% under the offers over price.

Thanks both for your replies. I did wonder if that would be the case, makes me wonder if we're ever going to find something in budget. Prices have shot up the last 2 years and no sign of slowing down despite everything going on in the world.

I do wonder how it's going to pan out long term. The scottish system is better in some ways but if you really want/need to move and keep bidding on properties but don't get them it can get really soul destroying.

Mopani I'm in the same situation as you at the moment (in Edinburgh, FWIW). The blind bidding thing is soul destroying and only benefits the sellers' agents. The home reports are a scam, as the EAs all have 'friendly' surveyors that can get them the valuation they've promised the sellers (i.e. inflated prices). Low interest rates encourage an asset bubble, as investors can get more returns from property. People relocating from areas of the country with typically higher house prices distort the market, as they can price-out locals. These things together are all contributing massively to steep house price rises.

BUT - you're increasingly seeing properties come back on the market as mortgage offers have not been approved at the last moment. This suggests the market isn't as buoyant as industry would have you believe and may be an early sign that prices will start to tail off soon. Also, not much has been coming to market in Q1 this year compared with other years, meaning what does is snapped up quickly. Industry thinks this is probably due to the winter lockdown and most people will hold off selling until it eases in April/May. More coming to market in the coming months will also help cool the ridiculous recent price rises. Former buy-to-let LLs and airBNB owners might also decide to cut their losses soon after a year of no income. These might help the situation.

Unltimately, though, only two things burst an asset bubble: rising interest rates and high levels of unemployment. The first ain't happening anytime soon, but the second looks like it'll be here by autumn

I think there's a noticeable number of former AirBnB properties on the market in Edinburgh, I've seen flats for sale (particularly in the old town) that scream AirBnB!

emma that's true - but most are priced v high and not suitable for a family or anyone wanting to wfh. Kitchen is typically in a cupboard or open plan to living/dining room, 2 bedrooms are frequently a single decent sized room split into two small ones. Storage space has been sacrificed to make shower rooms, as the airBNBs prioritised that.

It’s a very difficult market for buyers right now - we’ve found properties are selling for 20 - 30% over the valuation within days. Its very similar to 2007-ish, when things were selling crazy fast for crazy money. People sell then realise there’s nothing they want to buy, so bid high on the little that comes up. Then add in the many who are moving back up here having sold in the SE of England or believe they’ll be WFH so are looking further afield.
Just as the 2007 property-craziness was followed by huge drop in values...