5% stamp Duty rise

ReadySteadyPop

noddy11 said:

Peter999_2 said:

It's not fair at all Noddy11.  

Yeah it’s crazy, not much thought been given too this.

Going to pull of the sale in the morning as it’s just not viable to go though with the sale now (after other extra cost arose already this is just one too many for us).

They want more housing supply at a cheaper price, they seem to have thought this one through quite well, not sure about the other stuff yet though.

Herzlos

Is it really worth walking away from a property you presumably like, over 2%?

anselld

This is only on second homes which are a business transaction so no point getting emotional about it.  Presumably gross yield was 6% or more to make any sense so 2% is going to be circa 4 months rent.  It is not going to turn a good investment (if that’s what it was) bad on its own.

noddy11

Herzlos said:

Is it really worth walking away from a property you presumably like, over 2%?

There have been a few extra repairs, plus due to the house being an epc F it’s has to be a cash buy which I wasn’t aware of at the time of making the offer (there was no EPC when I made my offer) all of which has added costs plus now this extra cost so yes it’s is worth walking away I feel now.

EssexHebridean

Making it effective almost immediately is the only practical way of dealing with it - otherwise it causes chaos. We already see the panic that the approach of the end of any temporary SDLT structure causes - and that is frequently when people have had sometimes several years to plan for it - just think how much worse that would be if it was say 3 months notice! 

This way - if you have exchanged, or exchange is happening that day, all good. If you haven’t then there is still time to pull out. Nobody gets unwittingly stitched with paying money they don’t have. 

TheJP

EssexHebridean said:

Making it effective almost immediately is the only practical way of dealing with it - otherwise it causes chaos. We already see the panic that the approach of the end of any temporary SDLT structure causes - and that is frequently when people have had sometimes several years to plan for it - just think how much worse that would be if it was say 3 months notice! 

This way - if you have exchanged, or exchange is happening that day, all good. If you haven’t then there is still time to pull out. Nobody gets unwittingly stitched with paying money they don’t have. 

Remember this forum well during that time, people who made an offer 2 weeks before the SDLT window coming on saying they need to ask the seller for a reduction as they can't afford the SDLT. This forum is going to be like this over the next month or so with 2nd home buyers.

noddy11

EssexHebridean said:

Nobody gets unwittingly stitched with paying money they don’t have. 

Your wrong I’m afraid.

Not the case, people time, solicitors fees, surveys fees, search fees, mortgage adviser fees.

So people are 100 percent unwittingly stitched up with a day notice.

RAS

I just remember when Lawson removed the pooling of tax allowance on mortgage interest in 1988 (MIRAS). I had just started looking to buy a house but prices increased massively in the following months as people sought to beat the deadline.

There was a massive property drought, with few properties even getting on the open market. People bought unseen. Then a massive crash in prices after the deadline. I knew a couple who paid £52k for a flat they could only sell for less than £30k two years later.

I decided prices were unsustainable in the May and bought two years later for about 70% of the 1998 price.

Which explains why chancellors since don't wait for the negative impacts to wreck the housing market.

subjecttocontract

noddy11 said:

EssexHebridean said:

Nobody gets unwittingly stitched with paying money they don’t have. 

Your wrong I’m afraid.

Not the case, people time, solicitors fees, surveys fees, search fees, mortgage adviser fees.

So people are 100 percent unwittingly stitched up with a day notice.

But the election was months ago, the suggestion of tax increases was way back, most of us could see a possibility of this increase coming. Many could have pressed for early exchange/ completion to mitigate the risk. 

EssexHebridean

subjecttocontract said:

noddy11 said:

EssexHebridean said:

Nobody gets unwittingly stitched with paying money they don’t have. 

Your wrong I’m afraid.

Not the case, people time, solicitors fees, surveys fees, search fees, mortgage adviser fees.

So people are 100 percent unwittingly stitched up with a day notice.

But the election was months ago, the suggestion of tax increases was way back, most of us could see a possibility of this increase coming. Many could have pressed for early exchange/ completion to mitigate the risk. 

I was going to reply directly but see that STC has done it for me. The conveyancing world has had a relentlessly busy time of it since the election - with a vast number of investment properties being bought and sold. The savvy investors definitely saw the writing on the wall on this, and planned accordingly. (Indeed - new instructions from those people have dropped off significantly since the election too as a lot are holding off on doing anything about increasing portfolios until they knew what the situation might be)

Ultimately whenever anyone begins the process of purchasing a property - even for straight resi, you always have to assume that there is a pretty solid chance that you may end up with a transaction falling through, and costs being incurred. In reality, nobody should even enter into the process with only the bare minimum of "spare" funds that they need for a smooth transaction, as things can always go wrong, also in reality, in the world of folk buying houses as their own homes, this does frequently happen. The "belt & braces" approach unquestionably applies to investment property - if you don't have a reserve enough to cover contingencies, then you really shouldn't be in the game.