£250K stamp duty and impact on market

sebtomato

Hi,

Given the announcement today of no stampt duty for properties up to £250K, for FTB, what do you think the impact on the market will be?

I think it will bring down any properties with an asking price between £260K and probably £280K, since all the offers from FTB are going to be a maximum of £250K, and EA currently seem to expect offers at 10% below asking price (at least in greater London).

It was already the case before, for people trying to save 2% of the asking price, but now it will be 3% saved just in tax, if the £250K threshold is not reached.

On the other hand, I am not sure what the proportion of FTB would be for properties up to £280K. Probably quite a few in Greater London, but very few elsewhere.

Thanks,
Seb

superfran_uk

I don't know... Will it really have a noticeable effect at that end of the scale? I really wonder how many FTBs there are with access to a £25k deposit and a £225k mortgage!

Old_Git

surely this is just pie in the sky .This budget may never take off ,there has to be a election and the next government may not be labour .

sebtomato

superfran_uk wrote: »

I don't know... Will it really have a noticeable effect at that end of the scale? I really wonder how many FTBs there are with access to a £25k deposit and a £225k mortgage!

I tried to buy a property in 2007, but I was just horrified by what I would get for my budget in South West London. After visiting quite a few flats, I gave up at that time, and continued to save. I am now in a much better position, with a larger deposit, lower interest rates and cheaper properties (so more value for money).

I suspect there are a few people like me in London, and given the deposits currently required by bansk to access a decent mortgage, I assume that many FTBs will have a large deposit if currently looking to buy. Unfortunately, £250K buys a nice one or two bedroom flat in South West London, but not much more.

sebtomato

Old_Git wrote: »

surely this is just pie in the sky .This budget may never take off ,there has to be a election and the next government may not be labour .

If the next government was not labour, do you think the current budget could completely change, or is it adopted for at least a year as it is?

superfran_uk

Yes but pretend for a moment that the stupidly over-inflated prices in London are not representative of the rest of the UK. I live half an hour from London and I bought my first house last year for £190k, £250k would have got a 3 or 4 bed here.

People I know are becoming FTBers around the mid to late 20s. I suspect this is not the case in London. However the rest of the UK economy does not hinge solely upon people in London.

sebtomato

superfran_uk wrote: »

People I know are becoming FTBers around the mid to late 20s. I suspect this is not the case in London. However the rest of the UK economy does not hinge solely upon people in London.

I think I read that FTB are much older now, due to larger deposit needed. Probably even worse in London, due to the property prices. The salaries may be slighly higher, but not significantly higher to pay for the difference in property prices, or deposit required.

sebtomato

Apparently, the average age for a FTB would be 38 now, for people without assistance. It was 34 in 2008.

http://www.independent.co.uk/life-style/house-and-home/property/no-place-like-home-the-generation-who-cant-afford-to-buy-1921781.html

superfran_uk

Blimey! I would not have guessed that. I'm 26, bought my house at 25 and of my 10 or so closest friends, a large majority (7) have bought or are currently buying their first homes. Most of us went to uni so I suspect we are on higher wages than some but even so, 38?! That's a lot of renting and is a terrible situation for our country to be in.

sebtomato

superfran_uk wrote: »

That's a lot of renting and is a terrible situation for our country to be in.

Maybe it is not actually that bad for the country. It means people have to save for a deposit, the old fashion way, and will buy something they can afford. Having 22 year old hardly starting in life, and with a mortgage 5 or 6 times their salary is not really a condition for a sound market. It means the entire industry and banks are just speculating on prices going up.

googler

Down my way, the idea of properties around £250k being in FTB territory is virtually science fiction.

FTBs are likely to buying 1-bed flats at £90k - £110k, or 2-beds up to £150k or so.... IMHO