The boss of Hunters estate agents – which, since its acquisition of the Bairstow Eves franchised businesses from Countrywide, has become the largest independent estate agency franchise operator in the UK – is calling on the Government to delay reintroducing Stamp Duty for properties under £250,000.
Kevin Hollinrake said that first-time buyers would become virtually ‘extinct’ if the exemption is scrapped in March.
He said: “First-time buyers are already at an all-time low, accounting for less than 10% of the market, and reintroducing Stamp Duty for properties below £250,000 will further reduce this diminishing market to almost extinction.”
Housing minister Grant Shapps has said that the Stamp Duty concession has proved “ineffective”.
Hollinrake conceded: “The property sector recognises that the concessions might not have had the desired affect in stimulating additional demand, but it did provide some help to first-time buyers who are already suffering from the reluctance of lenders to finance their first home.
“The reintroduction of Stamp Duty could force thousands of people to postpone their dream of buying their own home. There needs to be some support for those struggling to get on the property ladder.”
Hunters is in the final stages of its rebrand of 90 former Bairstow Eves offices. Last September’s controversial acquisition propelled Hunters into sixth place as the UK’s largest estate agency brand.
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Comments
@Quality from rantnrave
Asks
"100% deposits, not 100% loans. What would happen to UK house prices if it became illegal to buy a property with borrowed money?"
Please define the term borrowed money.
To the berk who signs himself (this time, at least...) 'quality from rantnrave':
Okay, smarta$$ - you've quoted that phrase now dozens of times. Tell me:
1. WHAT is 'wrong' with it?
2. Suppose it actually DID happen. What then? Answer the question. Shed the light of YOUR knowledge on us.
You're so clever - prove it.
So far I only see a prat who contributes zero to any debate.
I think I'm finally figuring you out Brian.
You've told us you're not an EA and you're not a HPCer either. So... I'm guessing you've been watching a bit too much property porn and bought a place at peak prices, thinking it would make you a multi-millionaire.
Now, having realised how stupid and gullible you were, you post on a forum like this to try and make those who took much better decisions look daft too. You're bitter aren't you?
In your little world, someone who rents must be on benefits and someone who isn't massively in debt to their mortgage lender is a "leftie".
A question for you - if I looked through Krusty Allsopp's friends on Facebook, would I find your mugshot there?
Added by rantnrave on 2011-12-07 12:30:56
100% deposits, not 100% loans. What would happen to UK house prices if it became illegal to buy a property with borrowed money?
Sort of brings into doubt any other post really
@PeeBee
The Japanese experience is slightly different, they readjusted their economy to meet this current 'crisis'. The future they saw then is not the future we see now.
We must remember when discussing these countries that their civilizations are far older and much more experienced than ours, as for America it's still a baby nation [powerful yes but very inexperienced]. So they have the experience to read trends and see patterns we don't yet understand.
China can talk about 1000 year cycles, they have had many.
We have had 1, America isnt even 500 years old!
Now to this:
You say recession has led to unemployment. You are absolutely correct - but what I want to know - what puzzles me immensely - is that, when the engine is purring nicely, all these people are seemingly emploiyed for a reason. What changes? Why are these people no longer needed, or no longer employable? How does a company go from strength to strength - to oblivion?
Afraid I will have to give my tuppence worth next week
PeeBee - depends how much people 'want' or 'need' those widgets. If it's something they can do without during times of financial pressure, then the widget company is in trouble.
Alternatively, if someone in Vietnam can make similar quality widgets for half the price, then the company making widgets in the UK is also in trouble. It could try to lower staff costs, over a period of time, but then the staff can't afford the UK's high house prices on those wages, so they prefer to go on the rock'n'roll instead.
Immigrants then enter the UK to work for those lower wages, thus putting more pressure on the housing stock. They sleep three to a room, stick it out for a few years then return home to buy a house in their country of origin.
Tried to bring it back on topic ; )
rant. I knew that you would be first in line to answer my question! ;o)
Here's the thing. I accept most if not all of what you say. You always offer sound, reasoned points for debate - and they make sense. That said, there are sound, reasoned arguments to be offered for the reverse. I sit somewhere in the middle, I guess - as I do not believe that EITHER stance be the answer either short or long-term.
Of course, there are logical answers to it. Laws of economics; boom:bust cycles - the list goes on ad infinitum - but there is no COMMON SENSE answer, is there?
You have a company manufacturing widgets. They employ 200 people to make those widgets - have done since widgets were invented. Their staffing is based upon the numbers required to manufacture the numbers widgets they actually produce. No excess fat. A lean, profitable concern. Sure - if a big rush order comes in, they may need to hire a few more widget-makers temporarily if the existing workforce can't cope - but that never seems to be the case, does it? Instead, they treble their staff; invest in a squillion new widget presses; embark on a business plan that will surely result in the global domination of widgetting - and then file for bankruptcy with the loss of everything, including ALL jobs! Someone talk me through this, please...
The problem is that each and every industry is reliant upon profit. And from what I see - unreasonable expectation of said profit. Every year, you must do better - in the belief that it is vital for survival. So, every year the economy must grow to accommodate this growth of industry - yes?
THAT is unsustainable.
Why is no-one satisfied with 'same as'? Or even 'not as good - but still okay'? Surely these options are better than non-sustainable growth and eventual bust?
We have a growing population. More people, needing more commodities, requiring money from somewhere in order to exist. This growth should fuel a growth in economy as a result.
What process is in place to cater for this expansion of requirement? Is the process working?
I would suggest it is not. Far from it.
All a county mile off the subject of house prices and the housing market. Or is it?
PeeBee - unemployment becomes a snowball going down a snow-covered hill. Each person who loses their job has less income to spend in the economy, which means less stuff is bought and someone else loses their job etc. Unemployment tends to follow bad economic news, so it is regarded as a lagging indicator of the economy's health. The economy needs to show reasonable growth before unemployment is reduced.
So much of this is sentiment driven. People who hear that bad times might be on the horizon immediately cut back on their spending. It only takes a small percentage of the population to do this to result in unemployment. We're royally screwed now because not only are people spending less due to fears about their jobs, they also have debts to pay down too courtesy of the madness of the last decade.
The real issue in a recession is not the amount of money that's out there, but how quickly it changes hands. Thus, as Brits are currently tightening their wallets, the Bank of England is pumping money into the system through Quantitative Easing. This masks the size of the downturn, but once things do pick up again, there is too much money in circulation, which is usually mopped up through higher inflation (which often then needs higher interest rates to bring under control).
Re the dozen points from yesterday. I'm sure you'll agree that a beast as large as the housing market doesn't turn over night. It's like steering a giant ship.
What would see today's transactions increase to levels seen at say the turn of the century? Essentially, the standoff between buyers and sellers needs to come to an end. Doing that though requires identifying the weakest link on either side though.
Some, too many in my opinion, believe the solution lies in empowering all that pent-up demand with more lending. Bring on the 150% mortgages loaned at ten times salary level... The solution to a debt crisis is not more debt though. The UK has pushed this method as much as possible over the last decade and it has lead us to economic ruin.
The flipside involves releasing the pent-up supply. There are many out there who have little or no mortgage left and have no need to sell for lower than 2007 prices. At the same time, there are many who would need to sell for less than peak prices, were they not being indefinitely rescued by some very generous support from the government, lenders and 300-year low interest rates.
These folk I believe are the weakest link in the current standoff. What does the warning say about not being able to keep up payments on a mortgage? Some will no doubt consider this extremely heartless. A free market economy however requires that people and businesses be allowed to gracefully go bankrupt in order that resources and money can be allocated efficiently. Capitalism without personal insolvency is like Christianity without Hell - for the system to function properly, it can't always be good news for everyone.
This country's media are keen to focus on the family who stretched themselves to buy a four bed detached and are now struggling to pay the bills. They will get lots of sympathy, lender forbearance and benefits to keep them exactly where they are. Little mention is given to the families cramped into two-bed properties who have been more prudent and are being denied the chance to buy the larger property at an affordable price because the market is being manipulated.
I believe that addressing this underlying issue will do more than many options to "improve the current housing market". The political will is not out there though - the Tories let the housing market crash in the '90s and were out of power for the next 13 years. So, props are being put in place to drag things out as much as possible. I believe this will lead to a much more painful economic contraction dragged out over decades. Much better to rip the plaster off, have a p*** awful 18 months and allow a recovery from the ashes to take hold.
Over to you...
MIke. Thank you for your wish-list. Georgie-boy and I will need more than a quick cuppa to talk through these... ;o)
Interesting that you draw on America's present as a guide for our future (albeit hypothetical...) We have a real bright-spark who, unfortunately, occasionally graces us with his presence, who draws the comparison with the Japanese economy of the 80s and GB tomorrow...
I have a question. Not necessarily of you -but I would welcome youer answer along with whoever else wants to take a pop at it...
You say recession has led to unemployment. You are absolutely correct - but what I want to know - what puzzles me immensely - is that, when the engine is purring nicely, all these people are seemingly emploiyed for a reason. What changes? Why are these people no longer needed, or no longer employable? How does a company go from strength to strength - to oblivion?
I'll ask Georgie Porgie as well. He might have a clue...
@PeeBee
Are you ready for a major waffle [as Bazza would say]
To improve the housing market.
I look to America at what our future could be:
Recession has led to unemployment: where 2 people were needed to service a mortgage 1 loses their job, arrears pile up. The property market has crashed sending people into negative equity; they cannot sell to clear their debt so foreclosure follows. The family needs to be housed so now have to rent, you buy their house from the bank [short sell] for half of what they paid and rent it back to them.
Sunrise, Broward county Florida, on the high street you can buy a 2 bed family home for $75,000 It rents for up to $1400 pcm, you get the cost of the house back in 4.5 years, you don’t give a damn if the property value falls further, as everything after 5 years is pure profit.
For savvy investor’s happy days, for regular American folk they are living a nightmare. If you don’t know what you are doing, Stay away!
I see this day to day, the misery, the suicides, the desperate father slaying the family he can no longer support, the people hanging on in houses now worth $50,000 they have a mortgage of $150,000 on [they call this being underwater]. I am buying homes for as little as $3000 now & charging affordable rents [Normally anything under $10,000 is demolished & the land gifted to the state by the banks, as even they consider these a burden].
This is why you will not hear me calling for a drastic reduction in housing prices, it may seem to be the ideal way to improve the market, but it will seriously damage our economy & society, too many people have their lives invested in their homes.
Remember the majority of home owners are ordinary people, not BTL or investors / developers.
The problem with the current market lies here [quoted from property talk live]
“Demand for private rented properties has reached an all-time high due to a lack of mortgage availability for homebuyers in the residential mortgage sector and the difficulty for many in raising large deposits imposed by lenders.”
With any business you cut off the cash you kill it, the housing market is no different.
We need to release funds into the market.
We need to reduce the deposits required.
At this time in our worlds history we are undergoing vast demographic changes, the economy of the planet is being restructured, previous colonies and ‘3rd world countries’ are now leaving the chaos caused by the European economic expansion behind and the balance of world power is changing. In addition we have 7 Billion humans alive all competing for the same basic limited resources, water. Food and air. The shite we are in is not random, or accidental, it is planned [believe it or not] unfortunately as always it is the man at the bottom who suffers, those least able to fight their corner will be annihilated.
The deliberate shutdown of the money supply is part of this brave new world we are entering.
If you are familiar with Dickens Mr. Pickwick, at the end of the Book he took a modest home at a rental of £60 per year, today a man of Mr. Pickwicks means would be a homeowner, for him to actually be renting in his retirement has been virtually unthinkable for at least the past 40 years.
The average person has moved from a rental mentality, to a home owners mentality, and in the process have been systematically defrauded by a loan system designed to maximise profits for the banks and mortgage providers, whilst doing little for the buyers.
We have been blind to what is in fact a systematic global fraud as house prices have been artificially inflated year on year, so even if you sell on [not realising you have already paid twice the agreed value of the property] you believe you have made a profit and all is OK.
Until those who control the economy change the rules [as in the US] and it comes crashing down around us, this is the system we have to live with.
So all I would do is ask the government to copy the old GLC and provide mortgages for first time buyers; at fixed rates and at a 5% deposit.
I would ask for legislation that lenders can only ask for a maximum 10% for a residential mortgage.
I would demand that banks provide up to £n in residential mortgages per year and fine them, [money into the government mortgage pot] if they fail to.
I would regulate the EA industry as I have mentioned several times.
In a nutshell, I would inject cash into the system to get it started again, with a few controls to clean up our industry.
rant - why did I expect you to post I wonder? ;o)
Okay... I actually DO count you as one of the 'sensible ones' - so lets lave a look shall we. Item by item:
1. What do you expect this to do to 'improve' the housing market?
2. Where do you anticipate they will live at our expense instead? In someone else's BTL at a higher cost maybe?
3. Again, I ask what this will do to benefit the market. With rates at var nigh zero, prices of pretty much everything are going through the roof as it is...
4. I like your train of thought - but why more than one spare room?
5. As no-one believes the press anyway, suposedly - why bother?
6. Why? Land-banking is an essential part of a company's growth strategy. By ceasing this, land prices will go through the roof, mon ami. THIS, allied with the choking costs coming to build carbon-neutral homes by 2016, will price all but the most affluent out of the market for a new home. And will pull prices of older properties upwards along with it.
7. Okay - not such a daft one - however you have to realise that in order to be "evicted", tenants pretty much have to be axe-murderers in the making these days. Why not just build some purpose-built little enclaves for the worst of them where they can get on with their destruction of order around them and not bother normal folk?
8. Why? Second homes are exactly that. Somewhere to stay occasionally, therefore you use less of the services to which Council Tax contributes. Empty homes theoretically use NONE of the services.
9. Pensions are about as appealing at the minute as a f@rt in a spacesuit - and probably will stay that way for a generation or more to come. Banks and pensions rely on risk investment. Things are so bad and they are so afraid of muffing up again that I doubt they would invest on tomorrow being Friday if you offered them evens on it today...
10. A bit harsh, innit? The companies took the risk. They knew what they were doing - and knew perfectly well that the system was wide open to abuse. These are REGULATED businesses. Take out the ire on THEM, not the man on the street who simply saw it as a means to an end (which is how it was sold to him...)
11. Once again I ask what benefit that will have to the CURRENT housing market, rant?
12. ?? A little unclear here - do you mean tighten immigration AND build more houses, or tighten building? If the former, sure - that will potentially reduce demand and increase supply - but for the reasons I gave in #6, it will be short-lived.
Back to you, Sir.
Thanks, though, for taking the time to respond - and a good response (albeit predictable...!) to boot! ;o)
"I ask you and other sensible individuals to please tell me what you would like to see happen to improve the current housing market."
* An end to extended lender forbearance for those more than six months behind with mortgage payments.
* An end to SMI payments which keeps people indefinitely in houses they can no longer afford at taxpayers' expense.
* Pressure on the Bank of England to raise interest rates to at least 3% to fight inflation (which they should be doing).
* Legislation to prevent any homeowner with more than one spare bedroom from NIMBYing housing developments.
* Make all newspapers, such as the Express, sign-up to the Press Complaints Commission, so the owner cannot pass off his own vested interest in property as front page news.
* Legislation to prevent landbanking by builders for a period of more than 18 months.
* Improved rights for tenants so they cannot be evicted at such short notice.
* Much higher council taxes to be levied on empty and second homes.
* Action on taxes to make pensions more appealing and BTLs less so as long-term investments.
* All self-cert mortgages taken in the last decade to be reassesed and criminal proceedings taken for liars and those who complied with lending the money.
* All interest only mortgages taken out in the last decade to be reassesed and those with an inadequate capital vehicle in place to be moved on to repayment mortgages immediately
* Tightening of immigration and building more houses.
Anticipate lots of abuse in response ; )
It takes a brave (or foolish) government to change or withdraw a tax to such a degree.
Remember income tax was introduced in 1799 to pay for the Napoleonic wars - and somehow I think that's been paid for by now.
Pee I appreciate what you are saying but the majority of ftb's we are registering or selling to can save the stamp duty in a couple of months or the bank of mum and dad can help, I just don’t think it is going to have such a great impact, although if I had the choice, of course I’d prefer to see them exempt as they are at present.
PeeBee - There is no denying that a fixed fee is the 'fairest' option, but when are the Govt. fair? They would lose a lot of money on that!
The deposit amount a FTB now needs on an 'average' mortgage is pretty huge and the return of stamp duty is just a kick to Jacob's!
I think the 2nd tier of the ladder is finding it equally as hard, if not harder. Baby 1 or 2 on the way, mum has been off work earning a slice of her salary and now they are forced to move. Now you have agents, sol & removal fees (to name a few) plus SD. It's extremely hard to do while maintaining a fair quality of life.
That's the problem that we will face forever, just as was pointed out earlier, The Govt. squeeze any and every penny they can - and agents say Rightmove are bad!
I appreciate why SD exists, but taking £2k from a £200k property sale (for which the Govt. have contributed nothing) is pretty harsh. Perhaps a 0.5% rate would be fairer, but SD being as high as possible is a guarantee unfortunately.
You know what they say, death and taxes!!
MIke - in that case - I ask you and other sensible individuals to please tell me what you would like to see happen to improve the current housing market.
Then, when Geordie O and I sit down for a tiffin and a chinwag, I'll slide the conversation round... ;o)
PeeBee.
I think you going to get a call from George Osborne :-)
MIke: "Anyone care to work out what 1% of the total residential property sales would be ?"
Give or take a few squillions, I would suggest £1,427,553,600.
(Based on 880000 sales at £162000. Probably wrong on both counts there...)
Anyone care to have a pop at how much it was given the current system?
Ashford Agent. Thank you for your response. If I may, you state:
"...the small amount of stamp duty needed isn’t that great a deal in the grand scheme of things."
Interesting. Others seem to have a completely different view. And in fairness to them, we are talking about a figure somewhere between £1250 and £2500 - which in ANYONE'S case is a chunk of wedge not easily come by, or happily given away, is it?
As Pbro says, take that money out of a deposit and the mortgage you can get as a result (assuming 90%...) takes on a completely different appearance and brings you down a peg or two in the buying stakes. So - it has to be separately budgeted. How long will it take the average FTB to save up that kind of money?
I firmly believe that the problem has stemmed from all the bu99ering about with SD over the years. If it had remained constant; no breaks; loopholes; thresholds, then it would have been accepted as a part of the buying process. But every time there is a change it is heralded to be either the saviour of the market - or the grim reaper cometh!
Even in the late 70s - when I first cut my teeth selling houses, everyone in the industry panicked about lifting a price over £30,000, as we thought the extra few quid would scupper the chance of achieving a sale. Where were the poor buyers going to get the extra three hundred quid from? Funnily enough - the houses sold.
Ahh... those were the days!
PeeBee,
You are treading dangerous waters in these times.
We have a 'cash strapped' government who will stop at nothing to raise revenue [they are now stooping to robbing disabled children, and you thought stealing candy from a baby was bad!].
What you are suggesting seems fair in principle, but if implemented it will be as a 1% tax on the sale of homes, stamp duty will not disappear, some bright spark will guarantee himself a knighthood by laying this on Daves desk.
Just like the 'pay to drive' plans, thought of initially as a replacement for road tax, now being looked at as an additional revenue stream.
Anyone care to work out what 1% of the total residential property sales would be ?
PeeBee,
You are treading dangerous waters in these times.
We have a 'cash strapped' government who will stop at nothing to raise revenue [they are now stooping to robbing disabled children, and you thought stealing candy from a baby was bad!].
What you are suggesting seems fair in principle, but if implemented it will be as a 1% tax on the sale of homes, stamp duty will not disappear, some bright spark will guarantee himself a knighthood by laying this on Daves desk.
Just like the 'pay to drive' plans, thought of initially as a replacement for road tax, now being looked at as an additional revenue stream.
Anyone care to work out what 1% of the total residential property sales would be ?
Pee Bee, my opinion is that the small amount of stamp duty needed isn’t that great a deal in the grand scheme of things. I don’t think it will make much difference either way.
AoS: I've been thinking about yesterday's conversations on this topic. NOT the "handbags at ten paces" malarkey - just the meaningful stuff (of which in fairness there wasn't much when you break it down...).
"The problem is that the seller is likely to only negotiate within the value of their property - they are not interested in the other expenses the buyer incurs...they want an offer as close to their asking price as possible."
JUST SUPPOSE that some bright spark in Government decided to "make it so" - in typical Jean-Luc Picard fashion - and that SDLT became the responsibility of the VENDOR, not the purchaser. 1% of the completion price.
What would happen there?
"SD is not only a problem for FTB in my eyes. There are many 2nd time buyers who are forced to buy something bigger or move areas etc and like an earlier poster said, SD is a big obstacle for some and a hindrance for many."
Absolutely. Be seen to take with one hand; give with the other. Except when they 'take', it goes to the G, not them; and when they give, yes - it goes to the G. Canny job if you can get one!
I wholeheartedly agree that SD requires a review - and not for the first time I've committed my suggestion to screen. I honestly believe that a flat rate across the board will bring long-term stability. No tiers; no concessions; no loopholes - you simply pay based upon what you pay.
But as with all things, I am open to a better idea.
Someone convince me I am wrong, please...
Okay, Ashford Agent - bitching over - what's YOUR opinion on the subject?
At least I got a meaningful reaction from someone...
If you lot were as good at selling houses as your are arguing, then maybe you wouldnt have the time to spend all day on here. Blah blah blah blah blah!!!!!!
Nice try.
Jimmy. Didn't expect you to. Would have been disappointed if you had.
Anyway - you don't have to.
You know - that is all that matters... ;o)
Now can we be fwends?
I won't back down???.LOL
"I thought it would look a bit silly (childish even) using £500,001 but clearly you didn't." Bad news. INCORRECT use of the '+' made you look sillier as you continue to argue that you were right, when you weren't. You just don't want to climb down.
The word 'over' would have got you straight out of jail without passing "D'oh!", by the way...
Right. Now that we have got that out of the way, we both seem to agree that a flat rate 1% is a viable alternative to the current system. However you still have a problem with 'losing' the SD in the negotiations (although I see that you are getting there in your second-but last post).
However, please advise me where is the 'mortgage fraud' you refer to? A vendor can pay deposits; a vendor can pay SD; a vendor can include a 'free' Maserati' in the garage if they wish. It is up to the purchaser and their Legal Advisers to advise the Lender of the agreed purchase price and conditions, is it not?
Let's face it, Jimmy - all HMRC want is the dosh. HOW they get it won't cause them any sleepless nights, will it?
Do we agree? Or is this all gonna kick off again? ;o)
This is one we cannot win, once the House of Commons PLC Juggernaut sets its mind on revenue collection, no amount of common sense, ethical value, moral judgement, or humanity can stop the machine.
If they kill the market completely, there will be new taxes to compensate for the loss of this revenue stream.
And guess who will get the blame for destroying the market.
Govt, for all the bleeding heart nonsense don't give a toss about FTBs, EAs or even the housing market. All they care about is a spreadsheet and being able to siphon off enough money to line the pockets of the board, sorry meant the MPs, their families and cronies.
Today is cynical day in honour of St Sin patron saint of EAs
rantnrave on 2012-02-01 14:22:32
Bit late on the scene today! However, judging by the number of posts on this subject you are probably the only one doing any actual work today. ;>)
Let us hope that a client whose house is still unsold doesn't tune in. ;>)
PeeBee. We all know what the stamp duty thresholds are. I even went to trouble of putting the plus sign in to indicate that. I thought it would look a bit silly (childish even) using £500,001 but clearly you didn't.
LOL, Lies, damned lies and statistics. If you reduce the price to £198,000, the FTB still can't afford it as they still haven't got enough deposit. They would need £19,800 and they still have to pay the stamp duty. It would be better for the vendor the take £202,000 and pay the duty. And before you hark on about value, a surveyor will only advise against the loan if more than 5% out. Mortgage fraud, I hear you say. Yes, so is your example.
Robyn - "If a lender dreamt up a 100% scheme, unlikely but then they are thick, there would be a flood of buyers wanting it to get from the stigma of only being able to rent"
What is the stigma of only being able to rent?
But i agree they really would be thick to offer 100% scheme....which is why they wont.
The bankers are far from being thick...one thing is for sure, if required the EA industry would be allowed to die out the banking industry never would be.
Jimmy...Jimmy...Jimmy. What can I say?
"Read the post a bit more carefully. £500,000+."
Okay. I read it. Again. I will even spell it out better for you.
Five hundred thousand pounds plus.
Nope - still reads the same.
You see - it's WHERE you insert the '+' that matters. The fact that you use it AFTER the amount means that the original amount is the baseline - ie is included in the overall.
And, as I have already pointed out, and is verified on the HMRC website, £500,000 is the uppermost figure to which three percent Stamp Duty is applied.
4% kicks in at £500,001.
Now is that clear enough. I'm not sure how I would draw it for you - but I would certainly give it a try if you still have trouble...
Oh. One more thing. WHERE in my post that got you so uppity did I say ANYTHING about "getting the Vendor to cover the cost of the Stamp Duty by "negotiation"?
My poor old eyes can't quite see it - with or without bifocals. There's a good young whippersnapper - draw my attention to it for me please...
It's not all bad news for FTBs...
From the latest Land Reg data and spotted by the Guardian -
(average) House prices in north east fall below £100,000
http://www.guardian.co.uk/money/2012/jan/30/house-prices-north-east?newsfeed=true
Also, from today's Nationwide data - the average UK house price fell £50 a day in January.
Jimmy. Let's deconstruct what you've just said (before my new bezza mate PeeBee does it for you ;o)
"getting the Vendor to cover the cost of the Stamp Duty by "negotiation" isn't something I would be very proud of"
OK, the one clear way SDLT will affect FTBs is in a reduction in available deposit which can have a massive knock on on LTVs.
Let's say an FTB has a £20k deposit, plus money for solicitors but not SDLT and wants to buy with a 90% LTV product at £200k. If we take off the 2k for stamp from the available deposit, the amount available to borrow drops from 180,000 to 162,000, so their best offer would drop from £200,000 to £180,000.
I would be less proud of coming to a vendor with an offer £18,000 worse than it might have been. N'est pas?
Jimmy is correct. Anything over £500,000 attracts 4% duty. In Central London, that is pretty much most property.
Read the post a bit more carefully. £500,000+. Or get bi-focals.
I'm glad the irony wasn't lost on you. You have however redeemed yourself. "ALL transactions be liable to a flat rate 1% Duty" shows at least some hope.
Oh - and your knowledge of SDLT is sh!te as well!
A sale at £500k attracts SDLT at THREE percent, not 4.
Please amend your records accordingly.
Jimmy. Earlier I said you were beginning to worry me.
Now you tell me - and the rest of the world - that your seven year old daughter gets drunk with your knowledge.
I am now REALLY worried - not for you - for your children.
Please hand yourself in before the authorities track you down via your IP.
PeeBee. £500,000+ @ 4% = 20 grand+. My seven year old could work that out. Even drunk.
Jimmy.
From your FIRST post: "Are aware that someone in the middle of the chain is paying 20 grand? That's not part of the buying cost, it's cash!"
From the SECOND: "But it wasn't twenty grand, was it?"
I take it you are neither deluded OR affected by Alzheimers.
Just clearly 'under the influence'. I hope you do not have to drive anywhere today.
AoS - well! Do we disagree or not? I don't think so, really.
SD is one of the associated costs of buying a home. We all know it. In what is now coming up 34 years on the tools, I have ONCE had a buyer threaten to withdraw as they claimed they had not budgeted for SD (a claim I still doubt to this day...). It was the magnificent sum of £625 - 1% of a £62500 sale. We did a deal and each side paid half. In turn, I negotiated with MY vendor and got ALL his paid! I am sure that you have done the same many, many times.
Okay - the figures are different now I freely concede. But the principle is still the same. I wholeheartedly agree with you that the vendor plays greedy bu99er and wants the buyers eyes AND sockets - but the reverse is also true - and from what I read from a great many HPC posters, they seem to think that they can talk a better fight than the vendors and Agents anyway!
I DO agree with you that the whole system requires overhaul. Have said it before on EAT many times. But you and others will probably disagree with my proposal.
That ALL transactions be liable to a flat rate 1% Duty. NO exceptions. NO variable rates. Level playing field.
Don't worry - it will never happen. The government would deem that it would somehow cost them too much revenue...
Anyway - back to the debate.
Anyone want to tar and feather me? ;o)
Oh, and BTW, getting the Vendor to cover the cost of the Stamp Duty by "negotiation" isn't something I would be very proud of.
Yes PeeBee. But it wasn't twenty grand, was it? I refer to the coice for FTBs in my post, but my post was not about the article, it was about your delusion. Clearly Alzheimers, so I hope you have RETIRED!
Jimmy. Deluded? ME? I think not.
You refer to someone in the MIDDLE of a chain shelling out twenty large. Firstly, this article refers to FIRST TIME BUYERS, not those whacking a million squid into the monthly cumulative totals for housing expenditure we all get so moist over. If you've got THAT much spondies mate - you ain't gonna look a chump by haggling much over the SD.
Secondly, it IS "part of the buying cost". As is solicitors fees, disbursements, survey and valuation, removals...etc. I'm beginning to worry about you at this point...
As far as my memory goes - I think you have it the wrong way round. My LONG-TERM memory is fine, thank you. The first property I ever sold was in Octiober 1978, to a couple called Milburn. They paid £14250 for a four-bedroom semi house - number 11 Heron Close.
Would you like me to quote you the room sizes?
You say "Surely you recall the nineties when people moved a few streets into town, just to get into a catchment area, or be nearer the station, or simply because they preferred the road. Stamp Duty stopped all of that..." Here's a history lesson for you. Stamp Duty on property was introduced in the 1600's. It has been an integral part of the homebuying process for GENERATIONS.
From where I sit - you simply do not understand budgeting or negotiating.
I sincerely hope, therefore, you are NOT an Estate Agent.
PeeBee - We find ourselves on unfamiliar territory!!
I agree that buyers will factor SD into any offer they make. Absolutely. The problem is that the seller is likely to only negotiate within the value of their property - they are not interested in the other expenses the buyer incurs...they want an offer as close to their asking price as possible.
So, if SD is calculated in the offer, the buyer still wants to save as much money as possible to get a 'good deal'. The SD is just making the difference in valuations between buyer and seller even bigger really.
GS is a waste of space and if he didn't come waltzing into his chair without the HIP abolition promise, he would never have been so popular to start (very clever move on his part).
Now, on one hand you could say "Yes, the SD holiday has been ineffective". On the other (my stance), you could ask "what on Earth would've happened during the past 3 years if there was never a SD holiday?".
SD is not only a problem for FTB in my eyes. There are many 2nd time buyers who are forced to buy something bigger or move areas etc and like an earlier poster said, SD is a big obstacle for some and a hindrance for many.
I feel the whole system needs to be reviewed.
SD is just another cost to find, it has little to do with sales rates and prices. Look at the boom years it was there then and a higher cost. Are sale any stronger in SD exempt areas, nope!
Its confidence number 1 then deposit needed to get a mortgage. If a lender dreamt up a 100% scheme, unlikely but then they are thick, there would be a flood of buyers wanting it to get from the stigma of only being able to rent.
PeeBee, you are completely deluded. Surely you recall the nineties when people moved a few streets into town, just to get into a catchment area, or be nearer the station, or simply because they preferred the road. Stamp Duty stopped all of that, and all of that gave FTBs more choice. Are aware that someone in the middle of the chain is paying 20 grand? That's not part of the buying cost, it's cash! You think that it is not relevant? You must have a short memory.
PbroAgent. We don't see eye to eye much - do we?
Mate - WELL SAID! Thank you - I was beginning to think that I was the only person in the world who did not acknowledge SD as the primary reason why people do not buy.
Buyers have a budget. If the property, with the associated buying costs, is within their budget then they will offer to buy it. The buying costs become part of the equation. If, in order to pay SD they need to reduce their offer for the property, then that is what they do.
Been like that as long as I have put buyers and sellers together. This ain't gonna change anything.
If it does - then it is the fault of AGENTS and/or SELLERS, no-one else.
transactions and activity will increase dramatically as prices fall 30-50% and more for flats
the fact is just like the dotcom boom,prices are way way too high and unsustainable
ala japan its quite possible prices are 40% less than today in 20 years time
this bubble has gone on so long people think its normal
Not that the governement could have afforded to do it but they should have scrapped it across the board, as it is probably just as hard, if not harder for people that actually own a home that want to move on to save for extra stamp duty.
I don't think it will make much difference - it's not as if the holiday has inspired millions of FTBs to buy houses.
It just means that they will offer a bit less or negotiate for vendors to pay it.
Grant S is a waste of space and he has demonstrated this with alarming regularity so what does he know about it?
Ineffective my backside seems like he is talking out of it instead of sitting on it - so whats new we ask.
Nothing seems to be stimulating sales other than the desire of people wanting to move into the ownership market. All the publicity in the world will not make buyers jump up and down with glee and rush out to buy when there is no desire, lack of confidence in market levels and lack of confidence of keeping a job.
Get these three bits sorted out and some improvement may take place.
Oh by the way Mr s***t for brains Shaps - I suggest you try making stamp duty payable like all other taxes i.e. nil on the first bit then the %age on the next and then the next %age on the next bit etc etc. Now that just might make a difference to quite a lot of people, just might!!!!!
Try it and see if it works.
Can we have an agents forum on this and see the results here? How about it Ros?
apparently darn sarf prople on 50k rent 1 bed flats from people on 25k with 10 properties.
I have no doubt this situation will reverse and the guy on 50k will be buying some of the 25k's bankrupted btl portfolio
then perhaps the economy can grow.
one giant ponzi scheme ready to pop
FTBs are already but extinct and I am in the East Midlands, so heaven knows what it is like darn sarrf!