stamp duty overhaul

[ik9000]

If it causes an increase in market activity, then the reduction in average stamp duty could be balanced out by increased volume?

there may also be a tacit acknowledgement that the majority of movement in the housing market at the moment is in the £1m+ bracket, so actually even with no increase in volume the treasury is still making more money. Look at the graphs and how they diverge past £1m. I don't think that is by accident!

[cptwhite_uk]

It makes much more sense, and as someone who's looking to be purchasing a property in the 250-275k price bracket in the next 18 months or so, this has just saved me around £4600 (based on 270k). I've been hoping for a shake up of stamp duty given house prices were generally increasing so it's best news I've heard from the government, for my personal circumstances, in a long time.

[ik9000]

It makes much more sense, and as someone who's looking to be purchasing a property in the 250-275k price bracket in the next 18 months or so, this has just saved me around £4600 (based on 270k). I've been hoping for a shake up of stamp duty given house prices were generally increasing so it's best news I've heard from the government, for my personal circumstances, in a long time.

ditto. is it really that much? I guess it is. Suddenly that gaming laptop sounds like a more realistic prospect....

[wasabi]

It's a smart move. Now, tell the NIMBYs in this country where to go and start building more houses.
I say this as a home owner that stands to lose out if they build enough houses.

No thanks - the country is a polluted, overpopulated and congested cesspit already thanks to breeders and so-called developers.

[kalniel]

No thanks - the country is a polluted, overpopulated and congested cesspit already thanks to breeders and so-called developers.

People aren't going to stop having children just because the NIMBYs oppose a new set of houses in their area. They're already in the towns etc., they just have to pack in more densely.

On the other hand, more houses where people can work would entail less commuting and a reduction in congestion and pollution.

[Bagnaj97]

It makes much more sense, and as someone who's looking to be purchasing a property in the 250-275k price bracket in the next 18 months or so, this has just saved me around £4600 (based on 270k). I've been hoping for a shake up of stamp duty given house prices were generally increasing so it's best news I've heard from the government, for my personal circumstances, in a long time.

But in that price bracket specifically, is it really going to save you money? Under the new system, without the massive step in stamp duty, that pressure to keep properties at or under £250k is no longer there. Gone are the days where sellers of £250k-£270k houses would list them at, or accept an offer of, £250k knowing that nobody would pay the increased asking price in addition to the stamp duty hike.

[ik9000]

But in that price bracket specifically, is it really going to save you money? Under the new system, without the massive step in stamp duty, that pressure to keep properties at or under £250k is no longer there. Gone are the days where sellers of £250k-£270k houses would list them at, or accept an offer of, £250k knowing that nobody would pay the increased asking price in addition to the stamp duty hike.

yes, there will be a lot of revaluing in the next few days I think!

[kalniel]

But in that price bracket specifically, is it really going to save you money? Under the new system, without the massive step in stamp duty, that pressure to keep properties at or under £250k is no longer there. Gone are the days where sellers of £250k-£270k houses would list them at, or accept an offer of, £250k knowing that nobody would pay the increased asking price in addition to the stamp duty hike.

Which is a good thing - price now will reflect actual value, not artificially squeezed in or using tricks like fixtures+furnishings to get around stamp duty thresholds.

[Bagnaj97]

Which is a good thing - price now will reflect actual value, not artificially squeezed in or using tricks like fixtures+furnishings to get around stamp duty thresholds.

It will reflect actual value, yes, but for buyers in that bracket they may well be worse off. Whereas before they could potentially have got a £260k house for £250k+£2.5k SD (because the sellers would realise nobody would pay £260k+£7.8k SD), they'll now pay £260k+£2.7k SD.

Overall it's a good and much needed change, but for people buying a property just over the old threshold they've lost a huge negotiating point in their favour. They will have less stamp duty, but may well end up paying more for the property.

[kalniel]

Whereas before they could potentially have got a £260k house for £250k+£2.5k SD (because the sellers would realise nobody would pay £260k+£7.8k SD), they'll now pay £260k+£2.7k SD.

Before they would have paid £250k+£10k fixtures+fittings (or lost the house to someone who would). Now they pay £260k.

[scaryjim]

- The last crash was largely fuelled by a housing market bubble. I'm not convinced this isn't trying to reinflate that bubble again.

This was my first thought - all well and good (and probably worth ~ 1% at the next election), but do we really want an (semi-)artificially inflated housing market? It's hard to argue against it being better than the old system (although how much better will depend entirely on what size of house you want to buy and where you live), but I'm not sure what the aim of it is. Is it just a sop to people who wanted some kind of mansion tax (who will be interested to note the little inflection at around £1m where the new system actually reduces stamp duty), is it intended to stimulate the housing market (at which point the affluent buy-to-letters will be rubbing their hands with glee at the range of £250k+ houses that just got noticably cheaper for them to buy)?

What it almost certainly doesn't do is help the majority of first time buyers (most of whom I'd guess will be in the sub-£250k bracket, where this reduces the total cost of their purchase by well under 1% - and most northern FTBs will be well under stamp duty limits anyway); it's clearly nicest for purchasers just over the old inflection points, particularly £250k and £500k (plus, as I say, a small abberation at £1m). So, AFAICT it's a sop to middle-class, middle-England homeowners who can afford the deposits on £250k and £500k houses, that will happen to catch a few middle-class/wealthy northerners and some middle-England FTBs (at the £250k margin). It might also benefit some buy-to-let landlords, giving us even more rental properties without any proper regulation or control of the rental sector. Joy.

Has to be said, it's electioneering at it's best. A Conservative policy that largely benefits middle England but is unarguably better than the policy it replaces. Genius...

[Jonatron]

Has to be said, it's electioneering at it's best. A Conservative policy that largely benefits middle England but is unarguably better than the policy it replaces. Genius...

Did anyone expect any different with a general election next year?

[scaryjim]

Did anyone expect any different with a general election next year?

Electioneering, I expected. Something quite that well planned, not so much. Now I'm just waiting for the Lib Dems to take credit it for it once we get into the campaign proper I mean, it's got to be a Lib Dem policy, right? It's far too progressive for the Tories....

[DanceswithUnix]

middle-England homeowners who can afford the deposits on £250k and £500k houses

You mean people who want to move from a small house because they now have a family (and hence probably lost one income)?

£250K will get you an OK 2 bedroom house around here, that is seven times the local average salary. I have no idea how people survive in the likes of London.

Edit to add: I think it is the word "afford" that got me there. "Can somehow manage" is probably closer to the truth, feels like an out of control rollercoaster ride with a gun to my head with a mortgage hanging over me that won't be paid off until I am seventy years old.

[scaryjim]

... £250K will get you an OK 2 bedroom house around here ....

So, middle England then. That'll get you a nice 4 bed semi around here, and I don't live in the cheapest bit of Manchester (you can get 5 and 6 bed properties for < £150k if you don't mind what area you live in). But that's kind of my point. The biggest benefits will be felt by middle England, where both the Tories and the Lib Dems get a lot of their votes, and by the upper middle classes in the North (again, good vote-winning options for those parties). And the people who would feel any sting will be the extremely rich who can afford to cover it and will probably vote Tory whatever, and can potenitally be appeased by something in the main budget. It's a beautifully judged policy in terms of benefiting the people who might vote for the existing government.

[Saracen]

But in that price bracket specifically, is it really going to save you money? Under the new system, without the massive step in stamp duty, that pressure to keep properties at or under £250k is no longer there. Gone are the days where sellers of £250k-£270k houses would list them at, or accept an offer of, £250k knowing that nobody would pay the increased asking price in addition to the stamp duty hike.

It reduces the SDLT, which is an absolute, set in stone, with no ability to negotiate it.

At least if sellers try to increase the price, it's subject to negotiation which, as ever, depends on market conditions and the relative negotiating skills of the two parties.