Stamp duty back, House price crash back as well?

brit1234

Stamp duty

Today it has been reveiled that the stamp duty will return to normal as the beginning in 2010. Thats a return to1% tax on any property above £125,000, pretty much all property in London and the south east.

As predicted the Chancellor stated the economy was in a worse state then previously stated and they have been forced to borrow billions extra. Our stock market was only saved by Standard & Poor's cut it rating outlook on Spain from stable to negative. Spain is the only European housing market with a bigger bubble than ours. The green shoots and stimulas for the housing market are now almost gone and the economy is on a rockier base than previously stated.

So will the return of stamp duty now put off buyers?

Will it lead to people asking for bigger discounts to cover the extra costs?

I think it is safe to say we are starting to enter the double dip especially as we are looking increasingly likely that we will have a reduceded national credit rating.

Whats your thoughts?

http://www.guardian.co.uk/money/2009/dec/09/stamp-duty-holiday-pre-budget-report

http://www.guardian.co.uk/business/marketforceslive/2009/dec/09/marketturmoil

drc

Of course people will be willing to spend £££ more. Especially when you can get bargains like this shed in London for only £230k

http://shrinkster.com/1c00

Emy1501

I suspect we will find out in Jan/Feb where the market is going. If we do not see large numbers of new sellers or a deduction in potential buyers then I suspect headline price figures will continue to rise.

HAMISH_MCTAVISH

brit1234 wrote: »

Whats your thoughts?

That you have this place confused with www.clutchingatstraws.com

Another day, another batsh1t insane Brit theory as to why house prices will crash 50% by Christmas 2009 70% some time soon.

I note you still have fallacious information on your signature, despite this being pointed out to you on numerous occasions. House prices do not always stay low for years after a crash. They have only stayed low for years in one of the last three crashes.

And in this one, they rose by 10% in 10 months after hitting bottom.;)

brit1234

drc wrote: »

Of course people will be willing to spend £££ more. Especially when you can get bargains like this shed in London for only £230k

http://shrinkster.com/1c00

History

dateevent11 November 2009

• Price changed: from '£249,950' to '£229,950' [IMG]chrome://property-bee/skin/user_comment.png[/IMG]

29 August 2009

• Initial entry found. [IMG]chrome://property-bee/skin/user_comment.png[/IMG]

Thanks to property bee

Maybe not lol, futher reductions comming.


I know when I attempt to buy next year I will request a further 1% extra off for stamp duty especially when saving 25% for a deposit.

brit1234

HAMISH_MCTAVISH wrote: »

Another day, another batsh1t insane Brit theory as to why house prices will crash

Come on Hamish, lets debate this then. Who would of thought that you of all people would start to call people insane.

Now I predict that as central funding for stimulas like stamp duty cuts end the housing crash will continue again. Why do you state this is wrong?

HAMISH_MCTAVISH

PROPERTY BOTTOM - History tells us that property stays at bottom for less than a year and then rises very quickly with large gains in 2 of the last 3 house price crashes. :think:

As for this one..... see sig.

HAMISH_MCTAVISH

brit1234 wrote: »

Come on Hamish, lets debate this then. Who would of thought that you of all people would start to call people insane.

Now I predict that as central funding for stimulas like stamp duty cuts end the housing crash will continue again. Why do you state this is wrong?

Because the average deposit is already over 25 grand. If you've got the cash to plonk down a 25K deposit, raising another grand or two for SD is no big deal.

If we were still in the times of 100% mortgages, I might agree with you that it would have an effect.

But for todays buyers, it's insignificant.

Cleaver

brit1234 wrote: »

Today it has been reveiled that the stamp duty will return to normal as the beginning in 2010. Thats a return to1% tax on any property above £125,000, pretty much all property in London and the south east.

So will the return of stamp duty now put off buyers?

Will it lead to people asking for bigger discounts to cover the extra costs?

I think you'd be a fool if you said that this wouldn't impact on the market after Christmas, or that it didn't have an impact in the recent rises.

Having said this, I think if you've made a decision to buy a house then the stamp duty is just a very small part of the entire decision. Chosing to not buy a house because you have to pay stamp duty is a bit like not buying a car because you have to MOT it. So if the return of stamp duty does put you off buying then I think it's safe to say you were never that serious about buying in the first place.

As for your last question, I don't think people will specifically offer less. But I think it will be on people's minds and if I had a house uo for sale now for £150k and it hasn't sold, then the return of stamp duty certainly wouldn't help me achieve the price I wanted. It basically gives the buyer a bit more bargining power.

the_ash_and_the_oak

Well surely stamp duty was removed for a reason (its prescence must have been having some kind of negative effect on demand) and is presumably being returned because its perceived its presence is no longer a significant factor

What will actually happen I don't know but its difficult to argue for its continued abscence in the face of the 2009 rises imo (unless to say yes but there are fewer transactions but I'm not sure overall that fewer transactions are bad thing anyway)

Cleaver

brit1234 wrote: »

Now I predict that as central funding for stimulas like stamp duty cuts end the housing crash will continue again. Why do you state this is wrong?

I agree, to a certain extent, with Hamish.

If you're buying a house for £150k then your deposit might be £30k+, solicitor's fees and legal costs of maybe £1.5k, moving costs of £0.5k and a lot of people will then often spend a bit of money on doing up, DIY, carpets, bathrooms, kitchens, new furniture etc. I don't think SD coming back will cause most people to reconsider, because they are spending shed loads already. Most people are also used to SD: it's been around for years. The benefit of relatively low interest rates is, in my opinion, more of a driver to buy than the re-introduction of SD is a reason not to buy.

However, if we get suddenly high interest rates, another tightening on credit, a dissapearance of mortgage products and the re-introduction of SD then you'd probably see prices fall. Don't think we'll see the first one of these factors for a while and I think we'll see more and more mortgage products over the next year.