A Better Balance - Nova News Editorial January 2015

One of the challenges of writing any article for publication comes when you refer to statistics or reports relative to the subject i.e. the property market. You are often referring to historic documentation even though this may be only a few weeks previous.

The particular report I refer to is the October Housing report issued by the professional body to which I belong, The National Association of Estate Agents, which was released at the end of November. This suggests that a better balance is occurring between the number of buyers and sellers with their agents reporting an increase in the numbers of properties coming on the market in October and a slight reduction in the level of buyers “through the door”, with first time buyer numbers down 6%. This resulted in a slowdown in sales. The situation, I suggest, may be somewhat different to the market conditions in our locality as recently the property market has been very strong. One local agent I was talking to in mid November from just outside Newport told me that the number of sales had declined in the previous couple of weeks. It will be interesting to hear how our immediate Newport agents are reporting the market for November.

At the time I wrote my article the chancellor announced his autumn financial statement and this included a significant adjustment in the way that Stamp Duty Land Tax (Stamp Duty) is paid on property. Much greater minds than I will have analysed this in the 6 weeks since my article was written but it does on the face of it appear that properties priced over £250,000 will become more attractive with buyers having less stamp duty to pay on the purchase price. Vendors becoming less pressured to accept a figure below the £250,000 tax threshold. Whilst the Stamp Duty tax is 2% between £125,000 and £250,000 a buyer will in effect pay 1% of the purchase price for a £250,000 property. If a property is sold at £300,000 the buyer will now pay 5% on the difference between £250,000 and £300,000 ie 5% on £50,000 (£2,500 tax) This leaves the buyer with a Stamp Duty liability of £5,000, whereas under the old system the tax due would have been £9,000. (3% of the full purchase price) so the buyer will be better off and ultimately the seller may well achieve a higher selling price. Both parties should benefit. Buyers will pay less stamp duty on property purchases under the new system up to a purchase price of £937,500 compared with the previous arrangements.

May I wish you all a belated Happy New Year and hope that those of you who marketed their properties over the festive season and the run up thereto have had success in achieving sales.

 Andrew Mason Independent Valuer 07507 928008
Email andrew.mason1551@gmail.com