Stamp Duty Changes

TickersPlaysPop

The reason I feel it is worth stepping in to control the housing market demand is my lack of faith in the rate of house building increasing significantly.

Of course if the housing market worked 100% freely and we didn't have a housing shortage, corrosive price inflation, declining social housing, many wanting to buy but can't, I would agree let the world profit from our homes.

These problems will not go away quickly, including the building rate. So to me it is common sense to stop non UK resident investment.

Somebody was saying that if it wasn't for non UK resident investment a lot of homes would not be built.... so that means the barrier to building is not the planning permission system? It is more likely restriction of money from the banks and UK investors?

padington

Generali wrote: »

Realistically the impact will be somewhere between tiny and nil: we're talking about a few hundred quid for the vast majority of places and on a £2,100,000 Chelsea pad the tax apparently increases by £19,000, ie less than 0.1% of the value of the house.

The change is really about getting rid of some silly distortions caused by a badly thought out tax change.

I think you might be wrong, there's a lot of people in London sitting on two million pound plus houses who may well find the extra stamp duty tax encourages them to downsize, free up a load of cash, help the kids get there own place etc, the next time they get itchy feat. That will all increase the demand of the under a million pound properties. If I had a 2.5 million house and I thought that a couple of smaller properties would be a better investment and cost less tax, I would be tempted. The speculation upon expecting this behaviour could also become a self fulfilling prophesy.

chewmylegoff

padington wrote: »

I think you might be wrong, there's a lot of people in London sitting on two million pound plus houses who may well find the extra stamp duty tax encourages them to downsize, free up a load of cash, help the kids get there own place etc, the next time they get itchy feat. That will all increase the demand of the under a million pound properties. If I had a 2.5 million house and I thought that a couple of smaller properties would be a better investment and cost less tax, I would be tempted. The speculation upon expecting this behaviour could also become a self fulfilling prophesy.

Why would someone who owns a £2.5m house be more willing to sell it because the buyer has to pay more tax?

padington

chewmylegoff wrote: »

Why would someone who owns a £2.5m house be more willing to sell it because the buyer has to pay more tax?

Because 2.5 million properties have also become a poor investment in the current climate. Wealth is increasingly hard to tax with the advent of the internet and global companies so prime properties are now sitting ducks.

i'm beginning to think the best thing for prime property is for labour to get in, set their stall out and let the market realise things aren't going to be as bad as it was suspecting. Until then the constant threat of labour coming in, on top of the new changes, is a really bad omen for 2.5 million pound properties.

Prime property prices are made on speculation because it was a sure bet given low costs and high expectation of future capital appreciation, suddenly that dynamic is over, it doesn't bode well in my book.

Time to have more cheap property eggs in your basket and maybe quite quickly, markets tend to factor these kind of things in very quickly.

HAMISH_MCTAVISH

getmore4less wrote: »

It seems likely that the effects will be small, and almost all around the dead zones of 125K-135K, 250K-270k, and 500K to 525K.

It will stop the bunching up of pricing at the old thresholds and result in a smoother market, but overall, little difference.