House Purchase: Stamp duty threshold

hukd.deals

Hello,

We just had our offer accepted at £250,000, with the asking price of £256,000. This is a 3 bed detached in a very nice area.

We have been looking for almost 6 months but kept getting beaton in bidding wars. Our original budget was £230,000 max. But because of the market movement we were not getting anywhere. Then this house came along and our initial offer of £247,500 got rejected. And then £250,000 was accepted. Where we live, 3 bed semi's are going for £230,000+. This one has the advantage of being a detached, en-suite, bigger garden etc (compared to the semi's available). So we streched our budget and decided on buying this.

Now I am getting advice for friends and others that I'll not make any profit (even in a very good market) in case for some reason we decide to sell the house because of the £250,000 stamp duty theshhold.

There is a good possibility that we may have to sell this house and move to another country because of my husband job in 2-3 years.

Not really know if we are doing the right thing. As we want this to be an investment as well because we will be putting all are saving for the deposit. We do like the house and everything.

We are really really confused.

Pixie5740

There is a dead zone around £250,000 where people don't really want to offer something like £255,000 for a property because of the hike in stamp duty. It's not until the property value increases to around £275,00 and over that buyers consider jumping to the next level of stamp duty.

That said, if there's a good chance that you'll have to move in the next 2 or 3 years is it actually worth buying at all? Once you've factored in solictor's fee, mortgage costs and interest, stamp duty, etc would you in fact be better off renting for the time being?

benjus

I believe it's been rumoured that the £250k threshold may be moved higher sometime soon-ish.

You can also offer to contribute to the stamp duty to persuade buyers to ignore the threshold. I'm selling a place near the £125k threshold, which was marketed with a £132.5k asking price. I got a first offer of £124k, then replied to say that I would pay the stamp duty if they can go to £130k. So I got £4.7k more... If I hadn't done that I would probably have struggled to get over the threshold.

egoode

You could always rent it out if you move countries. I personally wouldn't buy a property unless I planned to keep it for at least 10+ years.

hukd.deals

Pixie5740 wrote: »

That said, if there's a good chance that you'll have to move in the next 2 or 3 years is it actually worth buying at all? Once you've factored in solictor's fee, mortgage costs and interest, stamp duty, etc would you in fact be better off renting for the time being?

True, but we do want to be in the market as well. Price rise of 15-20% will close any chance of owning a home for ever. And his job will keep us on the go for a long long time, then we wont be buying a house ever.

There is a good chance of moving but not definite and as someone suggested, renting it out is also an option.

Doozergirl

Is profit your only motivation?

No one knows what will happen to the housing market in your area. It might go up, it might go down.

There is a bit of a dead space between 250-265k, so in a flat or slightly rising market of less than 2% a year, you'll probably sell for £250k.

If prices fall, you'll sell for less than £250k but your next house will also cost less. If they rise 3% a year then in 3 years you're up to £275k.

Most of us go on to buy another house, usually a bigger, more expensive one. The more you make, the more the next house increases. If your price falls, the next house falls even more. Unless you're a developer, there is a rarely such a thing as profit until you start downsizing.

Until you or your friends get a working crystal ball, I'd buy for the reason that you loved the house and it was the right price at the time.

00ec25

if the job will take him abroad in 2-3 years and you sold up then you would not be in the market anyway so rather than worrying about will it increase in value you should be bothered about is can we let it out easily and thus keep invested in the UK property market for when you return

a house which will let easily may not be the same as one you would live in now as your "home"...

ConfusedofYorkshire

benjus wrote: »

I believe it's been rumoured that the £250k threshold may be moved higher sometime soon-ish.

You can also offer to contribute to the stamp duty to persuade buyers to ignore the threshold. I'm selling a place near the £125k threshold, which was marketed with a £132.5k asking price. I got a first offer of £124k, then replied to say that I would pay the stamp duty if they can go to £130k. So I got £4.7k more... If I hadn't done that I would probably have struggled to get over the threshold.

Is that legal?

getmore4less

hukd.deals wrote: »

True, but we do want to be in the market as well. Price rise of 15-20% will close any chance of owning a home for ever. And his job will keep us on the go for a long long time, then we wont be buying a house ever.

There is a good chance of moving but not definite and as someone suggested, renting it out is also an option.

Not sure of your logic here

When ever you have a gap you take the risk, so if you are planning to sell to move abroad you have the same risk then.

You need to be more sure about what you think you are going to be doing.

hukd.deals

getmore4less wrote: »

Not sure of your logic here

When ever you have a gap you take the risk, so if you are planning to sell to move abroad you have the same risk then.

You need to be more sure about what you think you are going to be doing.

It is not that we'll be moving aborad ro settle. We wil def be coming back. The point I made was to be in the market. Inflation will just eat what deposit we currently have.

hukd.deals

Doozergirl wrote: »

Is profit your only motivation?

No, just to stay in the market. If market goes uo, house price goes up. Just that a 3 bed is affordable for us right now and we want it to be affordable later. Even if the price falls, we still need a property to live in at some point of time.

But as I said this house will be all our savings so we would like it to grow as well.