Market house above or below stamp duty threshold?

[ruby29]

We are just about to put our house on the market but am still undecided on price to market it at.

We had 3 valuations ( 2 of which were just under the threshold and one 25k over). We have decided to go with one of the first 2 agents but have some niggling doubts about whether to try marketing at the higher price.

AS there are no houses of similar style that have sold in our area recently and we have done a lot of work on the house from its original state there isn't much to compare it to.

We are in south west London and market appears pretty buoyant considering economic situation. Several friends recently accepted offers at or above asking price within days and now completed.

Am just wondering how much being over the threshold would put viewers off?
Any thoughts?

Thanks!

Think most people look above their price range anyway. So someone looking to spend up to 500k would still view houses at 525k and assume the seller would be expecting >500k offers given the stamp threshold.

We're mulling over exactly the same question! (Except at the lower threashold, £250,000).

Have you got as a feel for what other similar properties are doing? Because they are essentially your competition. If no others are going for the higher price range then it won't work but if a few are it might I guess.

£25k is a lot over the threshold isn't it? It's the same at £250,000 - they jump from £249,950 to £275,000 it seems. I expect if it's on at £275,000 then you will lose a fair few viewers who cap their searches at £250,000 so they never even see your house in the listings. Having said that, if you want to go for the higher price I reckon you've got to go for it!

I think what we're going to do is try a few weeks with one of the internet EAs (like housenetwork.co.uk) as they don't tie you in and it only costs £600 (no commission! And they do everything an EA usually does except the formal valuation and viewings - you have to do the viewings yourselves). Like you we're in London and the market here is fast-moving so we should get a good idea in a few weeks whether it's a viable way to get a good price or not. If it doesn't work out then we'll either drop the price or engage an agent.

Oh, sorry I should have said, we're going to try the higher price with an internet agent for a few weeks.

We put ours on at 525 and sold for 500. It certainly didn't seem to put anyone off, as previously said, people set their search limit already allowing for a considerable discount. In addition if they are serious buyers, they are likely to set their search criteria higher, to get a full feel of the market (e.g. I have an alert set up for houses up to 800 K in the area I am searching in - not that I could afford that, but because it means I can work out how much of a premium extra land/period features/a certain road adds to a property price, which will help me with pitching my offer for the [cheaper] house I eventually buy). Also, once you've got circa 500K to spend on a house, it's likely you can 'absorb' the cost of the stamp duty, should an exceptional/dream/must-have house came up.

It's probably a bit more sensitive at the 250K threshold duty - if i saw a flat on at £275+, i would think 'they are obviously hoping to get above the threshold (otherwise they would have priced at £260' so if I categorically couldn't afford above the threshold (more likely at that level), it could put me off viewing, if there were lots of other ones within my price range.

I guess it all depends on how much you will be prepared to let your house sell for. If you would happily sell if you get an offer of £250 / £500, then I would price £260 / £525 but if you plan to hold out for a higher price, then set the prices higher, otherwise you won't get offers above the threshold (except in an exceptionally competitive market), and people will be a bit pissy, and less likely to increase their offer, if you reject their offer - 'why on earth did they price it at £260 if they weren't going to accept £250?'.

threeleftfeet another great feature of housenetwork is that all viewers who view your house but decide not to pursue further are asked to state the price they think your house is worth (I can't remember the exact wording, but it's phrased in a 'it would really help the vendor with their pricing if you could indicate how much you think the property is worth' kinda way, so you get some honest feedback to benchmark your pricing against.

I think if you're close to the threshold, people will only offer at or very slightly under the threshold in any event - no-one will offer say £510k (in my experience) simply because of the expense of that extra £10k. You will probably get the same number of viewings at £500k / £525k /£550 (I agree that people look at property over budget with a view to offering below the asking price).

We have recently purchased and got the price just under the stamp duty threshhold. I think people assume there will be room for negotiation to bring it just under. It not then no deal.

Our budget is £250,000 and when searching I looked for houses anywhere up to £280,000.

mahonga that sounds like a really good feature. Do they ask for any other feedback?

We've just started looking at houses to buy. We've seen two. I'm surprised that neither of the agents have called us for feedback (yet). Seems especially odd as the vendors did both viewings. If I was them I'd definitely be wondering what the EA was doing for that large fee!

Our budget is £250k and we've been looking up to £270k. We put an offer in on one at £265k for under the stamp duty threshold (and at the level entirely comparable houses have been selling) but they rejected it saying there was no room for negotiation below the threshold. We don't think they're really serious about moving.

we are also looking at the lower threshold and are looking at houses up to around £270k and would always offer £249,999 for obvious reasons. As mandy said nobody is going to offer 10-15k above any threshold for the sake of the added >£10k.

I would suggest marketing above the threshold but to expect to accept an offer on threshold. It is better than marketing it for £500k (as i presume that is your threshold) and getting say £470

damsel i agree - they will never get £265k and i havent even seen the house! i bet any EA worth their salt has said that to them

I think most people expect room for negotiation in the current market, and I think if you put your place on for over the stamp duty threshold, then people would immediately assume that you'd done that knowing full well what the stamp duty threshold would be, and expecting to take offers just under it.

It wouldn't put me off as a buyer at all - if anything, it would give me clear guidance as to what your ball park is.

It's worse than that, Martha. It's a new build and two identical houses in very similar positions (actually slightly better, as south facing gardens and nearer the nature estate) have sold in the last year, both for £240k. They are not going to get above the stamp duty threshold for it, never mind close to the asking price (which is what they want).

threeleftfeet They automatically send an email request for feedback as soon as the viewing is over (i.e. same day). They follow up tenaciously by phone until they get feedback (you get notified of each attempted contact on your interface). There's a section on the online form for free text feedback, and whether or not they would like another viewing/make an offer. If they say no, then they are asked the price question.

Sorry for the hijack OP!

Martha the next level of stamp kicks in at over £250k, so you don't need to knock that £1 off :)

rcheshire my DH is so tight he would want to save the £1 for a stamp

damsel that is just a larf. they need telling - send the MN jury round to them!

mahonga that's good to hear, thanks

FWIW just talking with an EA from housenetwork and he reckons the stamp duty threshold is less of a barrier in London than elsewhere

Agree with threeleftfeet above.

We were happy with our recent purchase (next bracket up) and ended paying the 5% rate .

We knocked them down quite a lot... well loads really... but it was still over the level. There is no way we could have got it for less and gone into the lower bracket without some very creative ilegal jiggery pokery.

But you know what, we wanted the house, its going to be a long term home, yes we had to pay a bit more in tax but hey so yes, it may not be a barrier to some.

(not in London either)

I agree Typicalvirgo - at the end of the day, the stamp duty at £500k is £15k and at £525k its £21k so its only a difference of £6k - in the grand scheme of things, not a massive amount if you're buying a £500k+ house. But I think here - the OP has had 2 valuations under the threshold and 1 above (but only £25k above). If the house had been valued at say £575k (or £300k at the lower bracket) then you can see that there is room for a chunk to be knocked off before it goes into the lower bracket, but if 2 valuers have said its worth £250k / £500k and only 1 has said its worth £275k / £525k, then thats an area where I think the vast majority of buyers will think that that the vendors have put it on at £275/£525k knowing that they'll get offers at the threshold.

Thanks everyone! Lots of interesting points there.

I agree that people are likely to search abover their max budget.

I think we probably we go for the 525k. Fingers crossed if people love the house they won't be totally put off by the extra (maximum of) 6k in stamp duty.

Would be pleased to get 500k but we are moving to a more expensive area and need every penny we can get...

Very useful to hear people's opnions rather than the estate agent speak.

Good luck to others selling

Personally, I think it would be rare to achieve between £500 to £550K unless it was a sealed bid scenario.