Mixed news on the home selling front - But there are bargains to be had!

Last year the Government introduced a stamp duty holiday as part of a package of measures to help rescue the economy which, as you will be aware, was in a dire state. The fiscal stimuli included the lowering of the VAT rate from 17.5% to 15%, the car scrappage scheme and the raising of the stamp duty threshold to £175,000 in combination with record low interest rates and quantitive easing (printing money).

The housing market was in a particularly parlous state at the time with reported drop in house prices being the most severe in Britain since 1931.

The stamp duty holiday has been a major benefit to the housing market, according to research undertaken by mortgage lender, Halifax. The data shows 112,000 homebuyers in England and Wales, or 31% of all buyers, bought properties between £125,000 and £175,000 in the first nine months of that tax holiday and so avoided stamp duty.

The Government have not maintained the £175,000 level and returned it to its original level of £125,000 which means all those homebuyers would now have to pay stamp duty again. The rate will be 1% on properties bought over £125,000 and this in combination with VAT returning to the 17.5% rate means that homebuyers have a lot of extra money to find. However, it is not all bad news as house prices have started to recover in recent months and whilst it might be said that this particularly results from fewer properties being on the market leading to a shortage of supply pushing up prices, there does seem to be overall more movement in house purchases.

A number of major lenders such as Santander and HSBC are making more attractive mortgage offers available. A number of the more adventurous builders are offering deals by way of part exchange and price incentives, which can often more than make up for that 1% stamp duty payment. This has also been reflected by enterprising moves by some private sellers looking to move up the chain and perhaps finding it difficult to entice first time buyers. You may have seen those sellers or estate agents advertising stamp duty being paid by the seller.

If you are looking to buy and can afford the deposit, there can be some real bargains out there with properties still not having returned to their pre slump prices. Also in general Solicitors, Estate Agents, Financial Advisors and of course you, as members of the house buying public, are all looking to do whatever is necessary to make a deal go through if it possibly can.

There seems to be a real positive buzz at the moment for this New Year, which we hope will go on past the uncertainty that is likely to be brought by the General Election.

Right now might really be the time to step into the market to achieve your long term future aims, whether it be for your dream home or property investment, or retirement property. In truth houses have only ever been worth what people are willing to pay for them and not some valuation figure that increased by percentages year on year. Houses should only have ever been bought as your long term home or as a properly considered and funded investment where the prospects of value depreciating as well as appreciating needed to be considered as with all investments.

In short, there is the prospect of a steady sustainable growth in the housing market which might be good for all of us rather than return to the boom time. The Government fiddling with the edges of its tax system may in reality have little effect on the market.

If you do need advice on house purchasing or sale, whether it be for investment or in the domestic or commercial market, please don’t hesitate to speak to our experts, Matthew Peel and Shoab Panwar, who will be only too happy to guide you through the systems and the various options and to also refer you onwards to Independent Financial Advisors and Accountants should this be necessary.

For more information, call 0161 839 2626.