Page 12 | To ask seller to reduce asking price due to stamp duty increase

5128gap · 31/10/2024 18:53

PilgorTheGoat · 31/10/2024 18:09

You could have been on your parents’ mortgage without being on the deeds.

It’s right people buying second homes should have to pay more tax, particularly when often the reason for it being a second home is so they can dodge paying inheritance tax on their parents’ property.

I don't think many (any?) lenders would have given the OP a mortgage on a property she didn't own. The whole principle of a mortgage is its secured on the asset the person owns, surely?
I imagine the OP has bought her parents council house for herself, using their right to buy discount.The parents have to be co owners or she wouldn't have been able to buy it.
I could be wrong but it's hard to imagine other circumstances where people too old for a mortgage suddenly have to buy a home, and their adult child steps in to buy it for them for £75k. Though perhaps there are.
The OP isn't saying, which is unfortunate as it makes a lot of the suggestions on the thread moot if that's the case.

PilgorTheGoat · 31/10/2024 18:56

5128gap · 31/10/2024 18:53

I don't think many (any?) lenders would have given the OP a mortgage on a property she didn't own. The whole principle of a mortgage is its secured on the asset the person owns, surely?
I imagine the OP has bought her parents council house for herself, using their right to buy discount.The parents have to be co owners or she wouldn't have been able to buy it.
I could be wrong but it's hard to imagine other circumstances where people too old for a mortgage suddenly have to buy a home, and their adult child steps in to buy it for them for £75k. Though perhaps there are.
The OP isn't saying, which is unfortunate as it makes a lot of the suggestions on the thread moot if that's the case.

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I currently have a mortgage with Barclays which is in mine and my ExH names. Only I am on the deeds. When we divorced my income wasn’t high enough to get a mortgage on my own.

rainingsnoring · 31/10/2024 18:57

Putneydad7 · 31/10/2024 17:47

It all depends on the market, if the market is booming they'd be nuts to entertain a drop. If it is flat or down, they may entertain it to get rid. I've bought and sold through both types of markets and been gazumped and been gazundered. You and your seller have their opinions. But these tax rises are designed to reduce upwards inflation on house prices and make them cheaper so you aren't being unreasonable.

Exactly. For a sale to proceed, some pragmatism and compromise is often needed. These changes to SDLT will have a negative effect on house prices just as the reductions that Sunak introduced had a positive effect. Sellers might not like this but they will need to accept it. That's how markets work. Whether this specific seller will accept a small reduction depends on the market in the area, their time frame and their financial position.

Moveoverdarlin · 31/10/2024 19:11

I would explain to your broker and try and borrow the additional money. It’s not the buyers problem. It’s yours. I’d have little sympathy that the seller has a second home and that stamp duty has risen. 10k in the scheme of things is not a huge ask.

Rosejasmine · 31/10/2024 19:25

In a similar position - very annoying but that’s not the vendor’s fault. In our case the vendor’s solicitors have been very slow - I’m intensely annoyed, but that’s just the way it is. Pull out if you have to.

PetuniaT · 31/10/2024 19:39

YABU. It's your loss. Rachel Reeves has done her best to crash the housing market with her tax tax grab and you would be adding to the misery if you demand a reduction to cover the Stamp Duty increase and, even worse, if you pull out.

5128gap · 31/10/2024 19:40

PilgorTheGoat · 31/10/2024 18:56

I currently have a mortgage with Barclays which is in mine and my ExH names. Only I am on the deeds. When we divorced my income wasn’t high enough to get a mortgage on my own.

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That's different though because one of the mortgagees (you) owns the asset, so if the mortgage isn't paid they could take the house from you. In the OPs case if she wasn't an owner and defaulted on the mortgage they couldnt repossess the house if it wasnt hers.

TakeMeDancing · 31/10/2024 19:47

Ouch12 · 30/10/2024 16:01

I've paid close to £75k, so selling for £1 isn't great for me.
I will speak to the broker.

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I haven’t RTFT. Be careful what you do here…if you come off of the deeds and are no longer an owner, if your parent needs to go into a home, the house is “theirs”, and the cost of the care will be funded by the house value. You could lose out on much much more than a few % of stamp duty.

SilverChampagne · 31/10/2024 19:48

5128gap · 31/10/2024 19:40

That's different though because one of the mortgagees (you) owns the asset, so if the mortgage isn't paid they could take the house from you. In the OPs case if she wasn't an owner and defaulted on the mortgage they couldnt repossess the house if it wasnt hers.

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Why couldn’t they? The mortgage op has taken out will have been secured on the house, regardless of any strategic shenanigans relating to the deeds and who have been registered as owners.

foresthump · 31/10/2024 19:58

Yes, i would ask

The housing market is slow and ive had to reduce mine by thousands to sell

5128gap · 31/10/2024 20:07

SilverChampagne · 31/10/2024 19:48

Why couldn’t they? The mortgage op has taken out will have been secured on the house, regardless of any strategic shenanigans relating to the deeds and who have been registered as owners.

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Only if a guarantor mortgage was taken out with the parents agreeing to use the home as security. Besides if as I suspect it was right to buy, the parents have to be on the deeds because its their right to buy it not OPs.

BrotherViolence · 31/10/2024 20:08

Ouch12 · 30/10/2024 19:31

Then I'd be giving up £100knin equity. I realise this sounds crass as I am asking the seller to reduce their asking price.

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Yeah, this is taking the piss.

HPFA · 31/10/2024 20:11

PetuniaT · 31/10/2024 19:39

YABU. It's your loss. Rachel Reeves has done her best to crash the housing market with her tax tax grab and you would be adding to the misery if you demand a reduction to cover the Stamp Duty increase and, even worse, if you pull out.

You're saying there'll be lower house prices? Wouldn't that be awful.

LondonQueen · 31/10/2024 20:15

No, unless there was another reason (House needs new windows etc) I wouldn't reduce the price.

niffynickers · 31/10/2024 20:19

No way! But if you had to pull out because of the stamp duty increase then and only them if the seller offers to reduce then go ahead. Else start again and look for something more affordable. Good luck

HPFA · 31/10/2024 20:20

I imagine the OP has bought her parents council house for herself, using their right to buy discount.The parents have to be co owners or she wouldn't have been able to buy it.

So in that scenario the parents have a secure (presumably lifetime) tenancy - the daughter effectively buys the house at a discount, then when the parents dies sells it at full market value? Meanwhile the person who might have had a secure home in that property is now in an insecure and expensive private rental quite likely financed by the taxpayer through housing benefit?

What a lovely system.

Flippingnora100 · 31/10/2024 20:28

AllTheChaos · 31/10/2024 18:43

The increase is only on a second property, so unless the vendors also own another house in addition to the one they are selling / one they are buying, they will not have to pay extra stamp duty. Op wants the vendors to sub her desire to own more than one house..

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Oh sorry - I don’t live in the UK anymore so I didn’t realize. In that case, I don’t think it would be ok for the OP to ask the seller.

Fridgemanageress · 31/10/2024 20:40

You don’t get if you don’t ask

Yoonimum · 31/10/2024 20:47

Rosscameasdoody · 31/10/2024 18:20

Compound interest. My SiL did this when her husband died twenty odd years ago. The interest racks up frighteningly quickly. She’s now run out of equity and will soon have to pay rent to live in her own home. I’d rather it be swallowed up in care fees and afford myself and DH a comfortable old age than see it go to ruthless equity companies who are knocking on your door the minute your equity runs out.

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Ah, OK. Although I believe there are companies that are recommended by Money Saving Expert and also products where you can make regular interest payments.

BoldAmberDuck · 31/10/2024 21:24

Yes I would lower the price to ensure the sale goes through

Donsyb · 31/10/2024 21:39

ItsVeryHyacinthBucket · 30/10/2024 19:40

No, of course not. It’s also my understanding that you can’t pay stamp duty out of your mortgage so just increasing that won’t work.

We paid the stamp duty out of our mortgage on 3 properties

Lyraloo · 31/10/2024 22:19

Ouch12 · 30/10/2024 14:55

Hello,
I am on the deeds for my parents house. They couldn't qualify for a mortgage as they were too old, so I was added to the mortgage.

I am now buying a house for myself - purchase has been ongoing for 2 months.

However, my can't buy me out from their current home - they just don't have the money.

In the Budget stamp duty on 2nd homes increased for 3% to 5%. This means I will need to find an additional £10k for stamp duty, which I don't have.
I will try to increase the mortgage amount to cover the extra £10kz

If the bank don't, I don't know how I will be able to afford the additional £10k. My parents are already gifting me money, so I cannot ask them any more.

Worst case, I might ask the seller to reduce the price by £3k -£5k but I'd imagine they'd be pissed.

Would you be willing to reduce the price if you were selling.

By my calculations your buying a second home worth £500,000 a cost a lot of people could only dream of and you want to ‘charge’ your sellers for the privilege ! None of this is their fault or responsibility, you’ve known for several weeks now that this was likely in the budget and you haven’t addressed it. You need to sort it out!

Lyraloo · 31/10/2024 22:26

SilverChampagne · 31/10/2024 19:48

Why couldn’t they? The mortgage op has taken out will have been secured on the house, regardless of any strategic shenanigans relating to the deeds and who have been registered as owners.

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I don’t believe she’d ever have got a mortgage on a house she didn’t own. The legal ramifications would be far too off putting for lenders. I’d bet that the parents had to sign a waiver at the time that they would have to move out if the op defaulted on the mortgage.

5128gap · 31/10/2024 22:28

HPFA · 31/10/2024 20:20

I imagine the OP has bought her parents council house for herself, using their right to buy discount.The parents have to be co owners or she wouldn't have been able to buy it.

So in that scenario the parents have a secure (presumably lifetime) tenancy - the daughter effectively buys the house at a discount, then when the parents dies sells it at full market value? Meanwhile the person who might have had a secure home in that property is now in an insecure and expensive private rental quite likely financed by the taxpayer through housing benefit?

What a lovely system.

Yes indeed. Exactly that. Which is why it's rather difficult to feel too sorry for the OP now she appears to be hoist by her own petard.

PetuniaT · 31/10/2024 22:35

HPFA · 31/10/2024 20:11

You're saying there'll be lower house prices? Wouldn't that be awful.

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It will be for all those millennials who find themselves with negative equity on their "affordable" rabbit hutches like all those keyworkers who got screwed under the previous Labour government.