stamp duty pricing problem. Reckon we fit in that no-man#s land!

[threeleftfeet]

We had our flat valued at prices stretching from £250K to £290!

Looking at comparable flats in the area, we put it on at £279,999. It was obvious at the time that this was where it fitted.

The others on at £250K simply didn't offer the space or features (garden, own entrance) that ours does, so that definitely seemed too low.

However since putting it on the market, others have come onto the market locally at the same price - or just £5K more - which are more desirable for one reason or another (quieter road / more desirable location / bigger garden etc) so we have some serious competition now!

I'm thinking that actually the natural asking price for ours is about £269,999 - but no ones asks for that because of stamp duty, do they? Or have I understood this wrong?).

I'm not keen on accepting a low offer at £250K as we won't be able to get a 3 bed family house where are - which is the whole point of doing this really. and I'm confident that that's too low.

If we did drop the price would that look desperate?

We've had a fair few viewers but no serious offers as yet. This waiting-and-seeing is driving me nuts!

Whether you put on at £279K or £269K, you are going to get offers at £250K, due to the stamp duty. The fact that one agent even suggested a £250K asking price back when you put it on the market, suggests that would be the absolute max you are likely to receive.

The flats you refer to as being on at £250K will be getting offers at the £225K mark.

We were in a similar no-mans land situation as you, but at the next stamp duty band. If there had been linear stamp duty, our house would have been 'worth' £525K, but as it was, we had to accept that the value was £500K (we therefore put it on market for £525K). It sucks, especially as we had done £150K worth of renovation to get to that valuation, which we didn't see any return on (we had to move due to work relocation).

Thanks for the reply :)

The agent that suggested £250k is a very local, old fashioned agent.

There are loads of rich trendy young things moving into the area, and I assumed that the other agents were more in touch with them.

Please could I ask, did any agents suggest you try it at the higher value, or did they say you should go for stamp duty from the start?

Absolutely agree with notsomanicnow - in fact I'd go so far as to say that any property in the £250-299k bracket should expect offers in the region of £250k given the stamp duty threshold.

Ultimately, your property will find its place - if you price at £250k and it is truly worth more, you'll have multiple buyers trying to outbid one another.

There are a few on at £255K - I'm assuming they're after stamp duty and I included them in the £250K lot.

I assumed some of them at £250K will be holding out for asking price, because of being at the stamp duty ceiling?

OP, Estate agents all said "put it on for between £525 to £550, but because of the stamp duty threshold, in all reality you are only likely to get £500".

Putting it on at £525K meant that if there had been lots of people arriving at the same time, all after the house, there was still chance we would have got above stamp duty, but in this market, that isn't likely to happen. We sold our house very quickly though, got a couple of £500K offers within the first week, and it was just a race for the interested parties to sell their own houses.

Perhaps, if we hadn't been so keen to move quickly (DS is due to start reception in sept) then we could have held out for more (we're due to exchange next week, and have just had the second offer family go SSTC on their house, and they have offered to gazump!).

I think your assumption that flats on at £250K will be holding out for £250, is wrong - if they would only accept £250K, they would have put it on at the £275 mark. People expect offers to come in at 5-10% lower than asking price so price accordingly. And sellers know that someone who has £250K will be viewing houses up to £275+ (and someone who has £225K to spend will be viewing houses up to £250K)

Please can I ask, if you thought your house was worth £550, would you have so readily accepted stamp duty?

but a house is only worth what the market will pay, and in a market where there are thresholds, a house's value may be lower than in a scenario if there were a linear stamp duty tax.

We had some friends who put their house on the market last November for £620K. We always thought their house was equivalent value to ours (my DH is a chartered surveyor/valuer). Their house is still on the market, two agents and several price drops later (including a 'vendor pays stamp' gimmick when it was on at £575K, I think) now with an asking price of £535K. There is no way they will get more than £500K for it. It's a great shame for them, as they overpaid for the house originally, and overpaid to rennovate it, and have been hit by the falling market, and they are also being hit by the stamp duty threshold. But all that doesn't change the house's value. Which is £500K.

A house is only worth what someone will pay for it. A sd threshold makes your house worth less because the extra buying costs eat up some of the extra perceived value in the property.

I think the effect is disproportionate because the buyer has to have ready cash to pay the extra as that part of the cost can't be tagged on to the mortgage ime.

£2500 extra cash to find is going to make most people hesitate if your house is not a heart-stopper and has little obvious advantage over the competition.

Most properties go for 90-95% of asking price so if you are asking 265 or 275 the max you are likely to viewget is 250 because of the Sd. If you bought for asking price in the boom you need to readjust your thinking for this bear market where most property will be selling for less than asking.

That is just how it is unless you are including lots of fixtures and fittings that can be sold separately and taken off the official property price.

You might have edged a higher price before but now that you have better houses on at the same price and you are not in a highly desirable area/catchment with high demand that is now unlikely.

Viewers without offers generally means they think the price is too high. How long have you been on?

Graph 1 here illustrates the issue (it's just for Scotland, and is 5 years old but I couldn't find anything better - I would be interested to see a more recent UK-wide one if anyone can locate it!)

www.scotland.gov.uk/Publications/2012/06/1301/14

It's only been on a couple of weeks :)

We bought a long time ago. We tried to price it relative to other comparable flats in the area, we're not going to lose money on it.

The flat is in London, so in a rising market.

That graph's interesting notsomanicnow, thanks :)

Not what I wanted to see mind - but useful none the less!

See I really think £250k is too low. Our flat is much nicer than those on at £250K.

The agent who said we should price at £250K said we could expect to get that. There's nothing on round here priced between £255 and £275 - so I assumed all the people who wanted stamp duty were advertising at £250 (like we were advised) and those at the higher rate were hoping to break stamp duty.

I'm another who's fallen victim to the SDT at £500,000.

My flat is 'worth' £550k or £575k based on what has actually sold for £600k in the same building. (I only have a roof terrace, whilst the other flat has access to a tiny back garden, though neither it nor the flat itself is newly renovated, as mine has been).

I would have accepted £500k to get my flat sold, and swallowed the 'loss' on the work I had done to the flat, if I'd been desperate to sell.

However, I decided that I wasn't desperate and I didn't want to actualise the £50k loss (which, taking tax into account, is £100k of earned income). I decided to rent the flat out and - after one pretty bloody awful experience - now have a complete star of a tenant.

If someone really wants your flat, they may be prepared to pay a premium (i.e. Stamp Duty) to get your flat. We paid just over the stamp duty threshold when we bought our house as they had plenty of offers at the threshold price and we loved the house and thought it was fairly priced (asking price of 10k over stamp duty threshold). We have no regrets and think our strategy worked to our favour as the sellers knew we were serious buyers and treated us incredibly fairly through an unusually stress-free conveyancing process.

Hi

Just wanted to say we have recently sold our 4 bed detached for £269000, based on an asking price of £279,995. Yes we did have some offers of £250000, but where we live that got you a 3 bed house not a 4 bed, so we stuck it out - the EA thought the house was well priced and others in a similar position sold for £265000 ish too.

Being close to the threshold doesn't automatically mean you have to accept £250000, although the agent did say if you market at less than £270000 you are unlikely to get any offers above £250000.

x

I expect your flat is a lot nicer than the ones ON at £250K as most of them will be eventually sell for between £200 and £225K! (a few of them might be with the agent who prices at what he expects to sell at, but that's a fairly unusual pricing strategy so will be in the minority).

Two weeks is still early days though, but I would have thought that if you were going to fetch up in the competitive situation MissPollysTrolleyed describes, you would have had some offers by now.

Round here, there have been a few properties advertised as vendor paying the stamp duty above £250k. Might be worth considering?

We've been looking at houses with a maximum budget of £250k (determined by the stamp duty threshold), so we looked at houses up to £275k. We (and all the EAs we've spoken to) figure that anyone asking for more than that isn't going to consider offers under the stamp duty threshold, and anyone asking up to that should realistically be expecting £250k maximum. Plenty of them should be expecting less that £250k, but they don't seem to think that comparable sold prices mean anything.

However, the vendors generally don't seem to see it that way. Without exception, they all think they're going to get the full asking price (or very close to it). Most of them, seem to think they'll make more than similar properties sold for in 2007 too (we're most certainly not in a rising market!), but that's another story. And the EAs tend to be full of nonsense about bidding wars and such like.

"Round here, there have been a few properties advertised as vendor paying the stamp duty above £250k. Might be worth considering?" We're asset rich but cash poor, so would have to borrow to get the stamp duty.

If we don't sell in a few weeks that might well be worth considering though, thanks for the idea :)

MyAngels that's encouraging, thanks :)

kensingtonkat we're not desperate to sell either. Very keen, but not desperate!

I think I'd probably also find a tenant rather than sell at £250K. It would just be a compromise too far. I reckon we need to sell at a minimum of £265K to get what we want in our new town.

As the market is still rising in London and some of home counties you may be okay it just may take a bit longer than it would have done.

"As the market is still rising in London and some of home counties you may be okay it just may take a bit longer than it would have done."

That's what I'm hoping. A bit nervous about banks collapsing and/or the recession deepening though!

It is SO frustrating. SDTs create 'pockets' of price distortion in the market and this isn't fair on buyers or sellers. WHY is it not just a stepped tax?