AIBU to pull out of house purchase at the 11th hour due to reeves

[BeGreatSheep]

We can due to exchange next week and I’m really considering pulling out given the general mess of the UK economy and the potential extra tax that have been suggested. Am I be ridiculous? Husband is team buy.

If you're buying the house purely as an investment vehicle then, obviously, you should look at real costs, potential costs, your financial exposure and your ability to withstand a drop in the market.

If you're looking to buy a home, then you should be primarily looking at whether you can afford the payments and if you love it

And if you're anxious, I'm not sure Mumsnet is your friend. Every thread produces posters with very different views; your anxiety will always make you pay attention to the ones that feed that anxiety

Good luck

It is.

Personally, I'm glad we have no plans to move. I'd rather be done and dusted with the factored in stamp duty (via savings, mortgage at purchase time) then pay thousands of pounds annually forever going forward in the form of property tax. That would be harder to magic up year on year for many, especially after retirement.

If you'd rather factor in stamp duty and get it done with, buy the house.
If you'd rather wait case stamp duty goes in lieu of property taxes for new buyers, pull out and wait to see what happens .

Most people don’t have much flex in their budget when buying a house

The whole Reeves proposal will cause issue in the property market and the government don’t sound like they’ve given it any practical thought as to how it would work. Last year they introduced the SD changes with immediate effect and it was a nightmare last minute scramble with conveyancers working up to midnight to try and get deals through before it all changed. If they do the same again I predict a bottleneck of transactions - buyers wanting to delay until the sellers tax is effective - and sellers desperate to push it through so they don’t get saddled with the new tax.

The sellers can’t t ally do anything to push it through other than give a part allowance towards the buyers stamp duty.

I may just book 31 October as annual leave.

To OP - buying a house is exciting, stressful and not for the faint of heart. But if you really do love that property and that’s the price bracket you’re looking at (over 500k) then I’d say go for it. That house may not be available in November.

Op do not pay attention to the posts on here shaming you for taking care of your own future and security.

London property has dropped 20% and isn’t showing signs of recovery, quite the reverse. The entire country is slowing to a standstill.

The main issue is going to be a stalling economy creating mass unemployment again under Labour. Are your jobs bullet proof? Do you have a very very large safety net? I am team op, even though pulling out is ghastly, it might well save your long term security.

In 2007 observers and analysts explored the red flags and using the same measurements now one could argue things are in a far worse state now. This government’s fiscal policy has ruined our prosperity and we are now heading for a full blown recession. The reason Reeves is still in post is there is literally no one capable or willing to take over.

I would be very careful op. Unless you are very wealthy and can weather any financial storm.

Don’t pull out.
You cant predict economic changes and you need somewhere to live. There is obviously a reason you decided to purchase.

If anything I would want to buy now as you know what you’re getting, I can’t see them retrospectively applying property taxes to those that have already paid stamp duty. I imagine if something like that comes in, it will apply to future purchases,

If you’re on a 5yr mortgage fix you’ll ride out most issues. So long as you can afford your repayments & aren’t totally over stretching yourself, you’ll be ok.
The issue in 2008 was people had 100%+ mortgages, so when the prices crashed, they owed more than the property was worth. When their deal ended they were on the SVR which was often unaffordable. Northern rock going bust compounded the issue because people were unable to remortgage.
Times are quite different now.
Underpinning the current housing market is a lack of supply and an excess in demand.

I've got a friend whose house was on the market at 565k last year, at which price he did actually get an offer. Buyer pulled out at the time, her circumstances changed, so he took a break and then put it back on the market. He's just sold it for 460K.

House prices are collapsing and the mainstream media are under reporting it because they're scared that they'll collapse further if they talk about it.

I think anyone who is looking to buy bigger would be well advised not to go ahead at this time.

She is exactly that.

Potentially you are looking at the guild market reacting very instinctively, the Truss situation paling into comparison….. a doom spiral is possible as Reeves makes one poor decision after another and compounds our fate.

Rachel from accounts will really have something to cry about then. There is no good scenario or outcomes on the horizon.

Unfortunately I don't see how it could be limited in application. Eg if you are selling a home above the threshold to first time buyers, who would pay tax on it? Not the buyers because stamp duty has been abolished, but not sellers because they paid stamp duty on the purchase. So then there's no tax payable. Sadly I think those who already own will simply be double hit- they've paid on the purchase and will pay again on sale.

Even if the housing market halves?…

That would be unprecedented. Even in times of recession that’s never happened and it’s always recovered to the point of overshoot.

I understand your hesitation, we got the call to exchange on our first home 2 hours after we woke to the news that the Brexit vote was 'leave'.

It is so hard to predict but I would say if it's a long term home rather than investment property, then I would go ahead.

They've never applied retrospective tax changes, so it would be ridiculously unlikely. And if OP is due to exchange it's unlikely she won't complete before the autumn budget which is the next time they'll realistically make a change

Then anywhere they want to buy will also halve.

Yeah, preposterous.

Cause nothing else 'unprecedented' has happened in the last few years, has it?

Anything is possible.

I read that the tax being considered is 0.54% on the value over 500k. Not sure on the value of house you are buying but worth working out what an implication could be, eg if your house was 600k as a purchase the tax would be £540/year in this scenario (eg 0.54% on the difference)

There’s rarely a good time to buy.

We bought our house just after Liz Truss tanked the economy when everyone was saying there was going to be a huge recession. The cost of living has risen but it’s still manageable for us so we’d have been kicking ourselves if we’d pull out over what ifs that never came to fruition.

It would help OP if you outlined the circumstances ie what you are moving from and to and figures.

What a ridiculous goady thread title.