The Chancellor has announced that stamp duty is to be abolished for all first time buyers on properties bought up to £300,000, effective from today. In addition, first time buyers purchasing properties up to £500,000 will pay no stamp duty on the first £300,000.
In his Budget, Philip Hammond announced that 80% of first time buyers would pay no stamp duty at all. With 358,000 first time buyers in the last year, this means that at least 24% of all sales in the UK’s housing market are set to be charged 0% tax. Once other exempt sales under £125,000 are taken into account, this figure will be even higher.
Two thirds of properties bought so far this year across the country have been under the new threshold but there are large regional variations. In Wales and the North East, over 90% of sales in the last year have been over £300,000 while just 17% of sales in London were for less than £300,000.
While good news for first-time buyers, this will further squeeze investors in the sub-£500,000 market who are already suffering from increased taxes. What's more, it does not, give any encouragement to owners higher up the chain to downsize.
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To put it simply, selling a home often boils down to the price. There are a few ways you can quickly identify properties which are overpriced, and this knowledge will put you in a better position when you’re looking to buy. It could well be a refreshing change to find that a property you love is actually overpriced, and not just completely out of your budget!
How long has it been on the market?
Typically, the first month on the market is when a property gets the most action. When the flurry of activity dies down and the property has been for sale for six months, it can become stale. An often-quoted statistic is if a home has been on the market for 60 days or more, the chances are it’s not priced correctly. Although, it is worth noting that high-end homes are often on sale for a longer period.
What condition is it in?
Emotional overpricing is a serious possibility. The love and investment we put into our homes feels like it should be rewarded. A home that is priced according to home improvements and amenities is unlikely to be accurate, especially if the owner is insisting on selling at a price which is based upon their monetary investments to the property, rather than on the value they have added. If this is the case in reverse, a home in poor condition which is trying to match the price of properties with a high-quality finish on the street is also likely to be overpriced.
Does it match the value of neighbouring properties?
If the property next door is worth a fraction of the home for sale something is amiss. House prices should be, within reason, comparable. Take a look at current listings and recently sold properties; this should give you a realistic view of the local market as what houses are listed at isn’t always what they sell for.
Where is it?
Location is everything. This is an extension of evaluating the local neighbourhood in some ways, but houses with a similar footprint will be valued differently according to location. A less desirable part of town is not going to achieve the same selling price as one on the trendiest street in town.
Essentially, something that is overpriced won’t sell – but that can also be an opportunity. If there have been no offers and a property has been on the market for a couple of months, it is worth making a lower offer. There is no need to make an insulting offer, but with a justified figure you may get lucky!
Value My Property