So happy my offer has been accepted? But oh WAIT, the dreaded stamp duty…
The Times recently stated, “Stamp duty only used to be paid by the wealthy property buyers but now it makes younger buyers poorer”.
As promised, here is an update on my last blog – the sales market is it doomed? I started the process of buying my first ever home in London.
To give you an update – I have had an offer accepted on an amazing property in my perfect location! So happy! But the excitement flattened, as a first-time buyer I was shocked in the increased stamp duty to 5%. I sat there – looked over all the figures – How do they expect first-time buyers to save for a deposit, pay the mortgage and solicitor’s fees as well as pay a hefty stamp duty? Naomi Heaton (CEO of a Property Investment firm in PCL) has said the fall in home sales is ‘very concerning given additional government schemes for first-time buyers’. The Guardian have also blamed the huge rise in stamp duty as London home sales fall by 40 per cent!
The Telegraph has stated that stamp duty is not actually helping first-time buyers – an example was shown of a married couple trying to buy in Brixton, found their dream home at £345,000, offer accepted but did not budget for the stamp duty and had to pull out due to an additional £10,350 for stamp duty that they could not find the money for! Contradicting the latter, Marsh & Parsons have stated that home purchases have increased from 22% to 34%, according to data collected from buyers across all Prime London. The FT have also said the 3% rise in stamp duty for private landlords has scared off buy-to-let purchases which have given a larger market to just regular buyers.
According to the Land Registry in 2016 we have seen that the huge rise in stamp duty is blamed for London’s sales falling by 40% with the average stamp duty at a whopping £16,500 – even more so in Central London with a 60% fall (only 62 properties were sold in Central London in 3 months!). Comparethemarket.com has shown that a third of people are choosing to renovate their homes instead of selling/ moving. I had this experience a few times whilst looking – viewings booked, properties had already decreased their prices by 20-30% and then the seller decides to not sell!
However, if we scrapped the stamp duty – what would happen to house prices?! Of course in logical thinking, bringing more people into the property market without increasing supply is likely to push prices up? It has also been suggested by Yorkshire Building Society, that Stamp Duty should be paid by the house sellers rather than the buyers to remove the burden of money so that younger generations who are struggling can actually get on the property ladder earlier in life!
So, what are you thoughts? Should the stamp duty be paid by the sellers? Should it be different for first-time buyers? Or has the increase actually helped the property sales market? I’m interested in your thoughts on this.
Doom and gloom have risen over the property market in the past months, especially focusing on the estate agency sales market. A question that is frequently asked of me is “Surely Lettings is doing a lot better than Sales isn’t it?”. But is it? I believe it is all a scare/ shock tactic of the EU referendum. As a first time buyer looking to purchase a property in South West London, I have had conflicting advice. I either hear “NO – do not buy now just after Brexit, bad idea WAIT” or “Yes April, it is a perfect time to buy, mortgages are at an all-time low!”.
So what is the truth?
What is the estate agency sales market currently like – behind all the façade of the UK exiting Europe?
I have researched this vastly for the past week, in property news, and speaking with brokers, Sales Managers, Sales Directors and various other estate agency professionals. It is clear that uncertainty shook the Sales Market after Brexit. The Guardian stated uncertainty of the EU Referendum drove the largest fall in people trying to buy a property since the Financial Crisis. The Institution of Chartered Surveyors (RICs) has also suggested the number of homes for Sale has declined more rapidly than at any other time since they started gathering information in April 1999! (Rics) have also stated that at least 1.8m more households will be looking to rent rather than buy a home by 2025. This has been proven by tenancies also increasing from 2.3m in 2001 to 5.4m in 2014. House prices in London are the second-most over-valued of all the world’s major cities, according to investment bank UBS.
The Guardians research, however, contradicts with figures showing the Brexit vote in June has not collapsed all consumer confidence which was so feared – Christen Lagarde stated prior to the EU Vote, that voting to Leave would lead to a crash in house prices. Whereas house prices have grown in September, and August by 0.3% and 0.6% according to their research.
Deutsche Bank analyst Reiff and Scheulfer made a huge case (over 70 pages worth) arguing that for any investor the economics in the London Property Sales market have been HAMMERED according to the FT times. The analyst’s state three main things to prove this fall – the tax deductions in 2015 have been restricted for higher income buy-to-let landlord’s. Secondly, increased stamp duty on buy-to-let and second homes, lastly changed the way landlords report their income, forcing them to register their gross rental income rather than the net income.
Facts, figures, stats and everything shown – People will still always buy in London, it is one of the most sort out cities in the word (even though it may be one of the most overvalued…). It will always be somewhere we (well me), will want to buy in.
What do you think? Is the Sales property market REALLY doomed? Or will it get back to normal as some facts have shown?…
I will keep you updated with my first time buying process.
Handing in your notice can be a daunting experience that most people face in their working careers but are you changing jobs for the right reasons? I’ve certainly faced it during my career in estate agency in both my roles as sales negotiator and Assistant branch manager so I know how it feels.
10 things to consider before handing in your notice
- Do you really want to change roles?
- Is this just a knee jerk reaction to something that has happened in the office, can you speak to your director and resolve the issue.
- What are your reasons for changing roles?
- Will changing companies actually benefit you or will it just be a short term solution to the existing problem?
- What can you bring to the role?
- If you get the role, can you deliver on the promises made in the interview?
- Is Property the right industry for you?
- Do you genuinely enjoy your role in estate agency or do you have a passion for another industry but may not be brave enough to take the plunge?
- What do you know about the company?
- Have you spoken to other negotiators or managers who work in the company, have you done research and due diligence?
- What are their values?
- How do they do things? Do you have similar values? Can you work in the same way that they do? Do you believe in the same things they do?
- How many deals do you need to do per month as a negotiator for the move to make financial sense?
- Are the targets achievable? Will you be able to perform in the role?
- Will you make more money?
- In the long term will the move leave you financially better off?
- Are you prepared to start from the bottom again?
- Trust and respect is earned and you will have to earn this.
- What impact will the move have on your work life balance
- What is the work/life balance like, are you prepared to put in the ground work whilst you establish yourself in your new role?
It seems like a lot to think about when handing in your notice, but these key questions will allow you to fully weigh up the pros and cons before you accept a role.
As property consultants specialising in the property sector, we have these conversations with Sales and Lettings Negotiators and managers on a daily basis to ensure that our candidates are making informed decisions about their future. We follow up with our candidates throughout their career, as we want to be on hand to help and offer advice at every stage.
Should you be considering your next move or just want some friendly advice, feel free to get in touch with me on 020 3587 7687 or email me at firstname.lastname@example.org
This is something I hear most days and have done since I started working in recruitment over 5 years ago… So if you are a candidate potentially looking to take your next career step why should you meet your chosen recruitment consultant/s?
Read more »
‘I hate my job’
‘I live for the weekend’
‘I am sick of doing the same thing every day’
‘I count down the hours until I leave’
‘I dread going to work’
‘I should be getting paid more’
‘I am not getting the progression I want’
If you find yourself regularly thinking this, IT IS TIME TO MOVE ON.
Read more »
Six Characters of a Property Manager. Who is a Property Manager? Are they sat in the corner of an office looking at a computer screen repeating the phrase “Computer says NO”? Someone who works their magic, makes sure that the wheels are turning and we never really know what wizardry they are up to?
Read more »