Stamp duty dilemma

kam0570

Hello all,

we have a stamp duty dilemma - any advice gratefully received..

3 weeks ago had our offer of £180,000 accepted on old wreck of a house (on for £199,995 originally)

then as everyone prob knows by now, government raises the stamp duty threshold to £175,000!!!

should we go in with a reduced offer as it would save us £1,800 cash?

ad9898_3

Hi kam, I have just registered on here after a long time lurking, I am an independent FA.....my advice STOP, in the last 3 weeks the price of the average house as dropped by £2500, at current rates average prices are falling at just over £100 a day !!,

Offer about £125000, you will then protect yourself from the worst of housing markets capitulation.

kam0570

Hi ad9898 thanks for your reply.

Would your advice be the same if i was to say it is a house i could spend the rest of my life in, and also to rent a similar property would cost us the same as the projected mortgage payments per month?

brit1234

I think my opinions are quite well known now, I still suggest not buying at all for at least a year and rent instead. If a £1750 stamp duty saving means that much to you why don't you wait as about £2,000 drops off properties price each month. Depending on the size of you deposit you could be in negative equity quit quickly.


We are going to have years of falls. House prices are overvalued and you will make a great saving if you wait. Don't fall for this stamp duty bribe, it is nothing compaired with the savings from the monthly price falls.

lil_miss_17

I think your advice is far too general guys. You cannot give numbers like that and expect them to apply to the entire UK. You have no idea where the OP lives and what the house prices are doing there. Also numbers can be very skewed - where I live flats are dropping every day but houses are not so much, but because of the flats it appears that everything is dropping......

Everyone has to look at their own individual situation, as to how long you are going to live there, what the LOCAL market is like for EQUIVALENT properties and also the house in particular. If you buy a wreck, you will add value as prices go down, and will cancel out a little bit of the drop.

I think people full of doom and gloom are fuelling the house price falls. People have to buy when it is right for them.

ad9898_3

kam0570 wrote: »

Hi ad9898 thanks for your reply.

Would your advice be the same if i was to say it is a house i could spend the rest of my life in, and also to rent a similar property would cost us the same as the projected mortgage payments per month?

The choice is yours obviously, however if renting at the moment would cost you the same as the mortgage, you would still be saving £100 per day, through house price falls. If you can live with the loss over the long term and you are sure you can live with mortgage payments then go ahead..... but be sure that what is coming is nothing short of a monumental "correction".

The banks will never again lend 6x multiples. The average wage in this country is approx £24500, 3.5x this and add a 10% deposit (4x at most) and there you have your "average" house price which would be between £95000 and £109000, current average house price is £164500 (Nationwide figures), now you see my point.

Good Luck.

swaninn

ad9898 we had an offer accepted at £130,000 with stamp duty paid, should we now pull out or get the price reduced? (It was on the market for £140,000)

nobblyned

ad9898 wrote: »

Hi kam, I have just registered on here after a long time lurking, I am an independent FA.....my advice STOP, in the last 3 weeks the price of the average house as dropped by £2500, at current rates average prices are falling at just over £100 a day !!,

Offer about £125000, you will then protect yourself from the worst of housing markets capitulation.

As an IFA, I hope you gather slightly more background information on your clients' situations before offering such sweeping advice on their large financial issues!!

pinkshoes

kam0570 wrote: »

Hi ad9898 thanks for your reply.

Would your advice be the same if i was to say it is a house i could spend the rest of my life in, and also to rent a similar property would cost us the same as the projected mortgage payments per month?

If this is a house you could spend the rest of your life in, and you're sure it's the house for you, then I'd say you should still go for it, but offer £175k. I'm sure they'll agree, as no one will offer over this amount now, as they'll want to save £1750 cash.

Some people will obviously advise you to rent, but then they're perhaps lucky enough to have a good rental property, a nice landlord, and haven't fallen in love with a house!

Only you know the area you're buying in, and the property, so at the end of the day, only you can decide.

nobblyned

swaninn wrote: »

ad9898 we had an offer accepted at £130,000 with stamp duty paid, should we now pull out or get the price reduced? (It was on the market for £140,000)

Now that stamp duty doesn't need paying, I would be looking for a reduction in price of that magnitude if you were happy with all other aspects of the deal.

kam0570

our situation is this:

in a two bed flat with baby and teenager, we're kipping on air bed in living room (baby has taken over our bedroom) because OH gets up at crack of dawn for work (alarm would wake baby etc etc).

desperate for a third bedroom basically and a house to boot, current rental cost approx £800+ for 3 bed in central colchester (lexden) - house mortgage would be £150,000 (house price £180,000 - have £30,000 deposit), at a cost pcm of £794 on a 6.39% 3 year tracker (not actual deal but just as an example)

with all that in mind - what do you reckon?