Lindsays predicts rise of "subject to sale" offers

"Subject to sale" clauses are likely to become a regular feature of property transactions during 2020, according to legal firm Lindsays.

The Edinburgh-headquartered practice says it has seen a significant rise in the number of transactions in the local property market in which the buyer places a condition on the purchase that they must sell their own property before the transaction can conclude.

It 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.

Estate agents are having to adopt new strategies in order to secure the best deal for their client, whether buyer or seller, by taking into account the likelihood of a problematic sale based on the property’s location, the selling agent, and so on.

Lindsays say this is limiting the supply of listed properties, and the firm is investigating with its clients whether a new "subject to purchase" condition by those seeking to sell could free up more properties for sale.

Andrew Diamond, partner and head of Residential Property at Lindsays, commented: "The ‘subject to sale’ trend is continuing in Edinburgh because of market uncertainty over 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.

"It’s a vicious circle which is gumming up the market, particularly for second and third time buyers, and it is likely that the market will react to this one way or another.

"At Lindsays we see the possibility of a new clause entering our lexicon – a sale ‘subject to purchase’. This would be a case of a seller – most obviously a downsizer or a family – listing their property and securing a sale conditional on them making a successful purchase.

"In other words, the same groups of people who are placing ‘subject to sale’ conditions on a purchase could turn this dynamic on its head and expand the supply of available properties by listing their property ‘subject to purchase’.

"This could develop into a major trend in Edinburgh in 2020."