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UK stamp duty changes set to save buyers an average of almost £1,600
Some 69% of home buyers across the UK are likely to benefit from the new Stamp Duty regime that was announced in December, according to new research. It is likely that 29% will experience no change and just 2% will pay more, overall in the UK, says data produced by the Nationwide Building Society, the mutual which campaigned for changes to be made. Based on 2013/2014 transactions data from the Land Registry, HMRC and the Council of Mortgage Lenders Regulated Mortgage Survey there will be an average saving of around £1,580 across a total of 647,000 sales. Overall home buyers in the UK could save £1 billion as a result of the Stamp Duty changes. For home buyers in England, Wales and Northern Ireland, the introduction of a progressive Stamp Duty Land Tax system came into force on 04 December 2014, while for Scottish buyers the Land and Buildings Transaction Tax changes are to be implemented on 01 April 2015. As a result, the average tax payable on the purchase of a home is likely to fall across the UK, with the average saving for each country, based on Nationwide’s analysis of Land Registry and Regulated Mortgage Survey data, is projected to total £912 million in England, £24 million in Wales, £82 million in Scotland and £6 million in Northern Ireland. ‘It’s gratifying to see the changes that Nationwide campaigned so long for, making such a substantial difference to the pockets of home buyers across the UK,’ said Graham Beale, Nationwide’s chief executive. ‘With the implementation of the new progressive approach in Scotland just around the corner, buyers across the UK will now only pay for the amount of their property value over each new threshold, a victory for fairness and another encouraging step for all those considering a move on to or further up the housing ladder,’ he added. For both England and Scotland, most likely to benefit from the changes are those looking to move up the housing ladder although duty payable on properties over £330,000 will be more expensive in Scotland than in England. It is expected that 2% in England will pay more, for 27% there will be no change and 72% will benefit. In Wales no one will pay more, 47% will see no change and 53% will be better off. In Scotland 5% will pay more, the highest in the country, 38% will see no change and 57% will benefit. While in Northern Ireland again none will pay more, 61% will see no change and just 39% will benefit. Continue reading
Edinburgh prime property market got boost ahead of new tax regime
Prime property prices in Edinburgh increased by 1.2% in the first three months of 2015 as buyers looked to complete deals ahead of a new property tax. The quarterly rise comes on top of a 0.5% increase in the final quarter of last year and on an annual basis prices are up by 4.1%, according to the latest market report from real estate firm Knight Frank. The new Land and Building Transaction Tax (LBTT) came into force today (Wednesday 01 April), and this led to a rise in buyer’s interest which in turn has boosted prices, says Knight Frank. The report also points out that, as was the case for much of last year, tax policy continued to play a defining role in the city’s prime property market during the first quarter. Under the new LBTT regime which replaces stamp duty, those buying homes worth less than £333,000 will pay less tax, however for homes above this threshold the upfront cost of moving will increase. The number of sales completed by Knight Frank between January and March was 47% higher than the first quarter of 2014 and 66% higher than the first quarter of 2013. Knight Frank expects that following the introduction of LBTT there may be a period of adjustment at the top end of the market as individuals factor in the increased cost of moving. Forecasts from the Office of Budget Responsibility (OBR) appear to confirm this, with the fiscal watchdog recently revising its forecasts for future stamp duty and LBTT tax revenues. The OBR said that the bringing forward of some higher priced transactions in Scotland before April will increase UK stamp duty receipts by £11 million in 2014/2015. The OBR subsequently reduced its forecast for LBTT receipts in 2015/2016 by £20 million. ‘Buyers have been taking advantage of the short window when purchase costs are lower. The buyer of a property valued at £1 million will pay nearly £35,000 more in purchase taxes,’ said Edward Douglas-Home, head of Edinburgh city sales at Knight Frank. ‘However, even with the new higher purchase taxes, the relative cost of property in Scotland compared to London and the South of England means there is still a large effective discount for buyers making the move north,’ he added. Indeed, the number of Londoners looking to buy property in Edinburgh in 2014 nearly doubled compared to the previous year, highlighting the city’s ongoing appeal. Douglas-Home added that despite the challenges facing homes at the top end of the market, there is a more positive outlook for the residential property market as a whole, with favourable market conditions with interest rates remaining at record low levels, economic growth steady and mortgage rates competitive. Continue reading
Prime property market in south west London less volatile, research suggests
The prime south west London property market has change dramatically from a year ago with more domestic buyers and homes taking longer to sell, new research suggests. In prime areas such as Battersea, Clapham, Wandsworth and Chiswick, prices aren't dissimilar, but there are no longer shortages and the market is less volatile, according to a report from Stacks Property Search. ‘Domestic purchasers dominate whereas a year ago the market was dictated by investment buyers, with buy to live purchasers struggling to make an impact. Early in 2014, buyers would have to compete with numerous competitive bidders, and properties were achieving up to as much as 15% above asking price. Successful buyers were using cash and those who needed finance weren't getting a look in,’ said Sara Ransom. ‘The return of domestic buyers means that property is taking longer to sell. Surveyors and solicitors are required to undertake more due diligence, so where property was taking two or three weeks to exchange contracts a year ago, the average is now around three to four weeks,’ she explained. ‘While the market is more grounded, and prices are more stable, there is plenty of momentum, and there's little sign of anything slowing down for Easter or the election. Our expectation is that it will gear up post-election as we don't foresee any political scenario that might adversely affect the market,’ she added. Ransom also pointed out that one of the biggest hurdles for any buyer is now finance. ‘Buyers really need to be on the case well in advance of finding a property as the process is becoming more and more protracted. The difficulty is exacerbated because mortgage companies are reluctant to talk in 'principle' any longer,’ she said. ‘And there are some mortgage companies that are gaining a reputation for approving finance then pulling out further down the line. Another difficulty is that mortgage companies are insisting that borrowers use a solicitor that is on their approved panel, so you will need to check this before appointing a solicitor,’ she added. The firm also believes that buyers should also be aware that it's difficult to get more finance for improvements, so buying a property that needs renovating is tricky unless you have a substantial deposit. ‘My advice would be to seek out potential for future improvement rather than property that has an urgent need of refurbishment. Remarkably, there are good examples of property that offers this kind of promise. For instance, adding a loft conversion to the pretty cottages on the Shaftesbury Estate in Battersea, resulting in three bedrooms instead of two, can add around £100,000 to the value, while the cost of the work is about £50,000,’ said Ransom. ‘Take plenty of time to research and understand the market, and the individual pockets within areas. Prices can vary by as much as 10% to 15% street by street. And don't dismiss areas without doing some pavement explorations. London changes so quickly, and areas that would… Continue reading
