0% Stamp duty threshold increasing to £500k

[Rebelwithallthecause]

Just seen the news that the chancellor is due to announce temporary change to stamp duty to help things along which will mean houses under £500k will pay now tamp duty

Not too sure how long this will run for but maybe a few years

Will this change your mind on if you stay out or sell?

We had been looking to love but started considering staying and extending but this would mean a big saving and might mean that more buyers would be interested in ours too

Yes there is on gov.uk

Calculators been updated hurrah: www.tax.service.gov.uk/calculate-stamp-duty-land-tax/#/intro

@ChocoTrio

I too am hopeful but fear that that this will contribute to price increases for the following reasons:

1. Greedy agents / sellers either pricing up or not accepting reduced offers as they know that buyer's purchasing power has increased - even before today's announcement I have noticed pricing reaching crazily overpriced levels to protect against "Covid offers" at 10-20% below asking. I have also seen posts on this exact thread stating that buyers have asked for price increases already (!). Anecdotal evidence I know but the property market is to some extent driven by irrational sentiment...

1. Buyers outbidding each other to pay over the odds with the SDLT uplift they would have received today - remember a property is worth what people are willing to pay for it and in many cases people have £15k more to put towards the purchase price than they did yesterday.

1. People planning on buying next year will bring their plans forward a year and join ranks with the existing "pent-up" demand, which will likely lead to greater competition between buyers. Ties in with point 2.

1. With the true economic consequences yet to be felt across the wider economy - I say this due to the ongoing furlough scheme and 6-month mortgage payment holidays due to wind down over the next few months - prospective buyers seem to be rushing to buy before they gradually lose access to wider mortgage products as incomes decrease / unemployment rises. I know of 2 couples who are actively trying to buy now with this in mind.

I don't really see the purpose of this - properties around here are selling quickly anyway so all that will happen now is sellers will put the prices up and pocket the "savings" so it won't actually be beneficial to buyers!

@PinkSpring - that's specific to your area, not the whole country... Also, sellers are often buyers too. It'll be swings and roundabouts.

@Cranton - Good points. It'll be an interesting balancing act because access to mortgages will still matter. For a lot of people it will just increase their deposit and mean a lower LTV.

Also those who are able to afford houses at the top end of the price bracket - do they really need the help?

Where is all this money coming from to pay for this?!

@PinkSpring But the point isn't about making houses more affordable. It's about keeping the housing market moving - and freeing up cash for people to spend elsewhere. Suddenly a lot people who have been saving for a house have a spare £15k that they can spend.

Sorry if I'm missing something obvious, but what's in it for the Govt?

Pink that's what I don't get, how can they afford to lose a huge income from Stamp when also funding furlough and arts fund etc? You'd think this is the one steady income.

Is it to boost the estate agents who'll get more commission? and developers who aer desperate to sell? but still that's not going into the treasure as I understand...

*Treasury

It's probably also a way of supporting the banks without directly bailing them out as well as boosting economy.

Buying property helps estate agents, solicitors and house builders and all those employed in these industries, so that’s one thing.

The stamp duty savings might be spent on home improvement or elsewhere, so that’s a second boost.

Actually, I’m not sure it was a great way to “spend” money, but I’m happy as I might get to escape my house at last!

It's not just the people directly involved - people buying homes usually means new furniture and appliances as well as new decorative items, new utility deals, add removal men, painters, plumbers and builders who will be employed to make any changes and repairs.

They see it as a loss leader - cut the stamp duty and you encourage someone to do something else. We are looking at a million pounds as budget. probably sounds massive but in london it doesn't buy a lot. If we go to our budget it will likely be used to employ someone to either remodel the bathrooms or kitchen - something we probably wouldn't have done without it.

@Livingoffcoffee yeah £15k if they already have over £500k to spend on a house!

Most people are only looking at savings of a few thousand, which will no doubt be swallowed up by vendors increasing prices

We're just in the process of completing on a £500k house. That gets a modest sized family home that is in need of a decent amount of work.

We definitely don't have £500k to buy a house. We can afford a mortgage for a £500k house. We've also been saving up for years to be able to afford the deposit and stamp duty.

With the change in stamp duty we'll now be able to spend that on work on the house we'd otherwise have to put off for a few years. Giving local tradespeople work they otherwise wouldn't have.

Don't get me wrong, I don't necessarily think it's the best support option in general. But I understand what the logic is. And thankful we're benefiting from it (suddenly glad we've had so many delays on our purchase)

Very happy for all the people buying their homes that will benefit but I wish they weren't extending it to BTL and second homers. I'm worried they'll snap up as much cheap housing stock as they can that would be far more beneficial to first time buyers.

I thought it doesn't apply to BTL, those rates remain the same.

@KoalasandRabbit Ah I didn't actually read past the headline of this when I posted that www.mortgagestrategy.co.uk/news/stamp-duty-cut-extended-to-second-homes-and-btl/

Looks like they pay the 3% extra only, not as a surcharge on top of normal rates.

I didn't realise they got a reduction thought they paid same as before, that's interesting that's its a lower rate effectively.

I initially thought this would be really good for us as second steppers but now I'm not so sure.

We had a valuation done the other day on our two bed terrace and were told that there had more demand than supply for houses like ours so we should get the price we need for it to be able to upsize. I'm a bit worried now that loads of FTB houses like ours will suddenly flood the market as second step people like us want to upsize without paying stamp. Our second valuation tomorrow has been cancelled as the estate agent says they are suddenly snowed under with demand from today's announcement.

Obviously it will save us a significant sum (as long as prices don't shoot up) but it won't mean a lot if we have to accept less for our current house.

Not sure what to think really!

Yes, thanks for those pointers - of course, the trade people and homeware shops would benefit too.

@SunflowerOwl - sounds like you would still benefit from trying if that's what you want. Try not to second guess what other homeowners are doing - some people just won't want to move, can't get a bigger mortgage (that will still be harder) and other factors.

Good luck and go for it if you want it!

@istheresomethingwrongwithme It looks like it does apply to us too.

@Maybenexttime08 It is 5% over 500K and a 3% levy on the whole amount for people with second homes.

It is really good news, we had an offer accepted on a house a few weeks ago. We were worried we bought too soon given the current climate but this helps!

We're in the middle of buying a house for 525 so this has helped us massively!!!!

Our second valuation tomorrow has been cancelled as the estate agent says they are suddenly snowed under with demand from today's announcement.
How unprofessional. Why cancel your appointment because a better offer came along. And to tell you the reason for cancelling too!

Now I'm worried that the EA will try to get a better offer from someone else. Our offer was accepted last week and we have begun the paperwork 😢 I guess I'd be worrying until we actually get the keys 🔑