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Category: Property Market News

Didsbury Home Buyers & Landlords Set to Save £1,446,030 in Stamp Duty Over Next Nine Months

The British are infatuated with owning their own property and politicians know that. Margaret Thatcher used it as a vote winner in 1979 when she allowed council house tenants to buy their own home. Coming to the present day, Boris Johnson’s Conservative government have anxieties that the Brits have not been buying nearly enough homes lately and, as with all countries in the world, the British property market was put ‘on ice’ for several months to help contain the Coronavirus, exacerbating the problem. 

The Chancellor, Rishi Sunak, announced on Wednesday plans to boost the property market by momentarily scrapping Stamp Duty Tax (a tax paid by homebuyers) when they buy a property that costs less than £500,000.

Interestingly, Stamp Duty was originally introduced in 1694 as a way to raise funds for The Nine Years’ War (1688–1697) against Louis XIV of France and applied to property and some legal documents.

Why is this important? Well the Government recognise that when the property market is working well, the economy also tends to work well, yet one of the barriers to people moving home is Stamp Duty. Even before Coronavirus, Brits were moving 40.21% less than they were at the start of the millennium, and now with this dreadful situation, the natural reaction is for people to stay put in their own homes, meaning another potential nail in the coffin for the economy.

Stamp Duty has raised not an insignificant £166.53bn since 1998, impressive when you consider the NHS costs £129bn per annum. Looking at more recent figures, the Government currently raise £1.045bn per month from Stamp Duty Tax and this statement will remove a good chunk of that from the Chancellors coffers each month, yet the Government knows a healthy property market will help the wider economy.

As Stamp Duty is a transaction tax, it restricts labour market mobility, making people who are thinking of switching jobs think twice before moving. Stamp Duty also holds back elderly homeowners from downsizing to smaller homes, which is an issue for the UK, as we don’t have enough homes to meet supply and also curtails first time buyers as it forces them to use some of the savings on the tax, as opposed to using for a deposit.

Before the changes, the Stamp Duty thresholds were as follows: 

  • Zero percent up to £125,000
  • Two percent of the next £125,000 (the portion from £125,001 to £250,000)
  • Five percent of the next £675,000 (the portion from £250,001 to £925,000)
  • Ten percent of the next £575,000 (the portion from £925,001 to £1.5 million)
  • 12% of the remaining amount (the portion above £1.5 million)

and between the 8th July 2020 and 31st March 2021

  • Zero percent up to £500,000
  • Five percent of the next £425,000 (the portion from £500,001 to £925,000)
  • Ten percent of the next £575,000 (the portion from £925,001 to £1.5 million)
  • 12% of the remaining amount (the portion above £1.5 million)

Landlords and buy to let landlords will also benefit from these reduced rates yet will still have to pay their additional premium for second homes (as they have since April 2016).

To give you an idea how significant this is, if these rules had been in place exactly a year ago for Didsbury properties purchased under £500,000 (i.e. between the 8th July 2019 and 31st March 2020).

Stamp Duty would not have been paid on 387

Didsbury (M20) properties, worth in total £106,321,300

Anyone buying any home in Didsbury over £500,000 are also winners in this, as they will save having to pay the first £15,000 in stamp duty (under the old scheme). This is because during these 9 months, stamp duty is only paid on the difference over £500,000 (so if you buy a property for say £620,000 – one only pays the stamp duty on the difference between £620,000 and £500,000 i.e. £120,000).

I’m all for reducing Stamp Duty, which is imposed progressively at higher rates the higher a property costs (as you can see from the tables above). Yet, short-lived changes to property taxation risk warping the property market and generating a ‘property market hangover’ in Spring 2021. I am part of a group of 2,500 estate and letting agents from the UK, and most of us were running at 150% speed before this announcement, coping with the post Coronavirus explosion in demand. 

Now it seems that the ‘feast’ will continue until the end of March 2021 as many more people will move to take advantage of the cut in tax. However, some are suggesting this could lead to ‘famine’ down the line as it will stop people moving into the late spring and summer of 2021. 

History tells us different stories on the influence on transaction volumes from changing Stamp Duty rates. In 1991 the Tory’s raised the Stamp Duty threshold at which house buyers started paying and Gordon Brown did so in 2008 when we went into the Credit Crunch. More recently, both George Osborne and Philip Hammond fine-tuned Stamp Duty so that landlords had to pay an additional Stamp Duty Premium after March 2016 whilst first-time buyers pay less Stamp Duty and the purchasers of more expensive homes (over £1.5m) pay more.

The Stamp Duty changes for landlords in 2016 affected the property market only for a short while and by the autumn, transactions levels had returned to normal. However, in 1991, John Major’s Stamp Duty change encouraged home buyers to bring forward home purchases but nevertheless the property market ground to a standstill again once the benefit ended (although the steps up the 1990’s Stamp Duty levels were much harsher as the tax applied to the whole purchase price, not the margin steps as it had in the 1990’s).

So how much money will Didsbury people save when buying a home under £500k?

The average Stamp Duty paid by those Didsbury home buyers in the 9 months between the 8th July 2019 and 31st March 2020 was £3,737 

Being objective, I can see why the Chancellor could see this as a suitable way to motivate spending because when people move home, they are more inclined to spend comprehensively on property renovations and the services of solicitors, home removal people, tradesmen and estate agents. So, drastically reducing Stamp Duty will undoubtedly help the UK economy, or at least contain some of the damage from the Coronavirus.  

Also, the experience of being in lockdown will have confirmed to many Didsbury people that they need a bigger home or one with a bigger garden. I also suspect other people may be able to work from home on a more long-lasting basis, meaning there could be a shift from the larger cities to outlying towns and even a move to the countryside.

So, these are my thoughts, what are yours?

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The Didsbury Post Lockdown Property Market

Didsbury Post Lockdown Property Market

What have we learned in the first month?

From talking to most of the Didsbury estate and letting agents and our own findings, it might surprise many of you that new enquiries from homebuyers, tenants, landlords and home sellers have been at record levels since lockdown was lifted from the property market in mid-May.

There are a number of reasons for this. Firstly, we had the pent-up demand for Didsbury property from the Boris Bounce in January and February. Next, many Didsbury people were planning to move this spring yet were prevented doing so because of lockdown, and finally, surprisingly, an advance wave of home movers seeking to bring their Didsbury moving plans forward because of a fear of a second Covid-19 wave later in the year.

So, what does all that look like and how does it compare to the last 12/18 months?

Data from Yomdel, the live chat and telephone answering service for a quarter of UK estate and letting agents, is able to track objective and more current information from across the UK on what is really happening. Each week, they are dealing with thousands of enquiries including: 

  • Seller enquiries (i.e. house sellers looking to put their property on the market) 
  • Buyer enquiries (i.e. people looking to view a property on the market with the intention of buying it) 
  • Landlords enquiries (i.e. landlords looking for tenants for their rental property) 
  • Tenant enquiries (i.e. people looking to view a property on the market with the intention of renting it) 

They have created a rolling weekly average of those enquiries for the whole of the UK for the 62 weeks before the country went into lockdown. Then they compared that 62 week average with specific time frames, namely the 10 weeks of the run up to the General Election, the 8 weeks of Post Boris Bounce in January and February 2020, the weeks of lockdown in March, April and early May and then finally, from mid-May, the post lockdown. 

You might ask why tracking estate and letting agency enquiries is so important? 

Enquiries in letting and estate agencies are the beating heart of the property market – they are the ECG machine of the estate and letting agency. Of course, house price data has its place and is lauded by the national press as the bellwether of the property market, yet it takes 6 to 9 months for the effects of what is happening today to show in those house price indexes, whilst these enquiries are what is happening now. 

Have a look at the data in the graph and table, it can be seen in the 8 weeks up to the General Election, every metric was down. Next, the post Boris Bounce saw house seller and house buyer leads increase yet note how low tenant enquiries were (hardly any change from the run up to the election), everything dipped during lockdown as expected, yet look at all the metrics post lockdown … amazing! (e.g. if a number in the graph/table below is say -25%, that means its 25% below the rolling 62 week average, yet if it were +20%, then that would mean it would be 20% more than the rolling 62 week average)

 General Election Run UpPost Boris
Bounce
LockdownPost Lockdown
Seller Enquiries-27.0%20.6%-41.9%94.3%
Buyer Enquiries-19.9%12.9%-9.3%163.7%
Landlord Enquiries-10.9%1.0%-27.6%78.5%
Tenant Enquiries-34.9%-27.2%-23.1%92.5%
308 Graph - The Didsbury Post Lockdown Property Market

The numbers speak for themselves! 

So, what is happening in the Didsbury property market? Well, there is plenty of activity in the Didsbury property market, yet that doesn’t mean everything is back to normal. Enquiries are an important metric, yet another way to judge the health of the property market is to look at the number of property transactions (i.e. people moving). 

Now the Land Registry data isn’t quite as exhilarating, yet it is less volatile. Nationally, it shows that property transactions were at their lowest level since its records began in April 2005. The seasonally adjusted estimate of UK residential property transactions in April and May 2020 was 90,210, 53.4% lower than the 193,500 transactions of April and May 2019. Again though, this was because of the restrictions on moving during Covid-19. The stats for Didsbury are still to be released, yet rest assured I will share them in due course.

Looking again at what is happening now, when I look at the number of properties for sale…

63 Didsbury properties have come onto the property market in the last 14 days alone, and of those, 9 are already sold subject to contract

So, what of the future of the post-lockdown Didsbury housing market? While a stern recession seems almost guaranteed, a housing market crash is not. Many newspapers are predicting property values to fall in 2020, then rise reticently from the ashes in 2021. The fact is, nobody knows. The property market is driven a lot by sentiment. Buying a home is not like buying stocks and shares – it’s a home to live in … and those Didsbury landlords who are looking for an investment opportunity, often let their heart rule the head (again sentiment) when investing in property.

Property always has, and always will be, a long-term investment. Many of you Didsbury people reading this, especially potential Didsbury first time buyers, have been putting off buying your first home because of Brexit, now its Covid-19, and in a few years, it will be something else. There will always be ‘something else’… and you could get to your 50’s and 60’s, still renting, waiting for the ‘next thing’ to pass before you buy … and end up buying nothing.

Nobody knows what the months or years ahead will bring … yet what I do know is, people will always need a place to live. Please let me know your thoughts in the comments. Tell us what your experiences are as a Didsbury landlord or homeowner, tenant or buyer so we can all learn from each other.

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Top Tips For Viewing A Property

When it comes to buying property, it is important to keep in mind that it could potentially be the home you live in for the rest of your life. With this in mind, it is essential that when you view potential properties that you take the time to be thorough and get all the information you can.
To help make sure you don’t miss a thing and make the right choice when you do eventually make an offer, we’ve compiled the following list of tips to help you to view a property like a pro.
Don’t rush
We all feel a bit strange viewing someone else’s home, but as we said earlier, you could be living in this property for decades, so don’t rush through this process! It’s vital that you spend close to 30 minutes exploring the property, asking questions and just getting a good sense of how it feels. If you just wander from room to room, taking a quick look and then moving on, you won’t get a good feel for the property. Taking that little extra time will mean you are well-informed when you come to make a formal offer.

Think about how much space there actually is
When it comes to property, space is one thing you can never have enough of. Whether you’re looking to fit in that Queen-size bed or you need somewhere to store all of the precious knickknacks that you have collected over the years, space is incredibly valuable. Pay attention to the way the current owner has laid out the furniture, as it will provide you with some insight into how to best make use of the property’s available space. It’s also an excellent opportunity to think about how much room your items take up and whether there is any scope for a little pre-move declutter.
Take a walk through the area
When you’re buying a property you’re not just investing in that building, you’re also investing in the neighbourhood itself. If you’re first-time buyers and looking to build a life in this new home, you have to ask whether the area is suitable for your family’s needs. Are there plenty of shops close by? How do the local schools perform? It’s best to wander around the area for a short while in order to see how it all feels, after all, if you’re going to be here for some time, you need to feel comfortable.
Once you’ve taken a good look, take another and maybe another
As we stated at the beginning, when it comes to buying property it’s best done the right way, but even when you do everything right, it’s always best to check things twice. No matter how thorough you intend to be there is always the possibility that you missed a couple of things the first time around. Most would advise visiting a property 2-3 times and at different times of the day – if possible – to see if you feel the same way each time. Buying a home can be very exciting, so it is worth visiting the property a few times.
Don’t forget that your agent is there to help you! Make sure you ask them questions about the property’s history and the local area, as they will be more than happy to assist you with your decision.

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How To Transform Your Kitchen On A Budget To Achieve A Quick Sale

In often cases, the kitchen is what holds properties back from selling quickly. Not everyone can afford to replace a full kitchen, but with some pointers, and a few YouTube tutorials along the way, you can learn how to make affordable improvements yourself. Without breaking the bank.

A typical 8-unit kitchen that provides 10m2 of storage space can cost at least £1000. A larger kitchen however, requiring 20-units, giving 30m2 could be more like £7000 and that’s not even including the worktops, appliances or installation fees. Besides, if you were going to invest that much money, you’d want it to be for your own kitchen that you can enjoy yourself! With our kitchen guide, you can transform your kitchen space for under £80!

Before we start, you will need: (For the best quality supplies, head to Dulux or Johnstones.)

• Dust sheets! Old bed sheets will do too or these can be ordered online for as little as £1.
• Degrease wipes £2 from any supermarket
• Advanced primer in white £8
• Water based acrylic satin, mixed in any colour you want £9
• Foam roller £4
• Paint brush pack £11
• Mini roller bucket £3
• Knotting solution £7 (if necessary)
• New cupboard furniture, around £20
• Sanding pad pack £4

Step 1. PREP
Start by removing cupboard and draw furniture (handles and knobs.) Use a screwdriver to do so, usually either a flat head or a Philips. Then start sheeting the floor. You don’t want any paint splashes on your tiled floor (use masking tape to secure if you’re worried.) With your sanding pad, start going over the ins and out of your cupboards. Be thorough and make sure all food splashes are rubbed off. Dust down well. Then with the degrease wipes, give everywhere a wipe down. This is important and if done properly will help the paint sit better on the surface.

Step 2. BARE WOOD?

This step is only for those who will be transforming bare wood units. After wiping down, get your knotting solution and with a cloth or thin paint brush, ensure all wood knots are covered well. If you don’t know what a knot looks like, give it a google! We use this so the darkness of the knots, don’t shine through under the paint, especially if it’s a light colour. This dries instantly, so about fifteen minutes later move on to the next step.

Step 3. PRIME.

With a 1.5-inch paintbrush start applying the advanced primer. This removes the porosity creating a smooth coat ready for the following final coats. To get the best outcome do two coats, just to get a good coverage, avoiding any other colour or wood flashing through. Leave around 3 hours in-between coats and overnight for the last.

Step 4. PAINT.
Grab the water based acrylic satin, a clean brush, foam roller and mini roller bucket. This stage can vary depending on what cabinets you have. If you just have flat doors and draws, then that’s easy! If you have grooved or paneled cabinets, then this will require just a little more attention. For flat doors, with the brush, paint the outskirts of the door. Do one door at a time and don’t do a wide area, keep it neat and narrow. Coat the roller well in the acrylic satin and spread evenly over the entire door and lay it off well so there are no bubbles and is evenly covered. Don’t forget to do the side of the opened door as well. Don’t apply any more paint to the roller, just run it up and down and it will cover perfectly. If you want to do inside the cabinets as well then repeat this process.

For grooved or panelled doors, paint with a brush the panels and grooves, if there is an area larger than the width of your roller, roll it. If it is smaller and needs the paint to be worked into it, then stick with a brush. Lay it off well with the roller again to make it smooth and even. Using a foam roller will eliminate any brush marks and will make it look like the cabinets were that colour to begin with!

Make sure all edges are painted. This stage needs two coats, so wait 6 hours between coats and then overnight after the final. You might be thinking this will take up too much time, but I would say it’s much better than having fitters in and leaving you without a kitchen for a couple of days.

Step 5. DRESS.

This is the fun part. Now everything has dried, removed the sheets. To make the kitchen more modern and in keep with the transformation, you may want to replace the furniture. You can get a pack of four handles from Wilko for £6. When putting these on, be careful not to scratch your masterpiece! Dress with a new fruit bowl, a fresh bunch of flowers or some hanging green plants.

There are millions of hints and tips found online. Look through Pinterest for colour inspiration and watch any YouTube videos along the way if you find yourself struggling. Just by doing this can really increase your chances of selling. A major kitchen remodel only returns around 80% on to your investment, a minor remodel like revamping your cabinets, has an 87% return!

For £80, it’s a no brainer.

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interest cut

Interest rates have been cut to 0.25% in a bid to shore up the economy amid the ongoing coronavirus outbreak. This is the first time since the financial crisis that the Bank of England has announced an emergency move.

Low interest rates may well help cushion the housing market in the months ahead. Over 70% of homes are purchased with a mortgage.

According to data from the Bank of England, activity in the mortgage market is currently at a four-year high and mortgage rates are increasingly competitive on the high street.

In 2008, interest rates were cut for six consecutive months, falling from 5% in September 2008 to 0.5% in March 2009. Low interest rates helped the property market rebound throughout 2009.

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government announce 30% discount for first-time buyers

The government has announced its First Home scheme, a policy which plans to offer first-time buyers a 30% discount on some new build homes, aiding affordability by lowering mortgage and deposit costs.

The First Homes scheme would reduce the average price of a first-time buyer property in the UK from £285,874 to £200,112. Assuming a 20% deposit and 80% mortgage, using the scheme would reduce a first-time buyer deposit by £17,152 and the mortgage needed by £68,610.

Currently it is thought that the discount will be locked into the property to ensure more first-time buyers benefit in years to come.

The government is committed to delivering one million new homes over the next five years and the First Home scheme would ensure a proportion of these are available to first-time buyers at a discount. With Help to Buy due to end in 2023, First Homes could help plug the gap. However, there are concerns that First Homes will come at the expense of traditional affordable housing, such as affordable rent, social rent and shared ownership.

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Managed Service at Julian Wadden

Landlords come face to face with problematic tenancies once tenants move into property.

I talk about some of the benefits of why Landlords should use a competent agent to deal with the ongoing tenancy.

Please watch my latest video and if you would like more information, call me on 0161 249 5160 / 07584 038 497 or drop me a line moharramrehman@julianwadden.co.uk.

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Buyer Demand Soars

Recent data released by Zoopla has shown that 2020 has started in supreme fashion for the property market; with buyer demand up 26% when compared to the same period in 2018 and 2019. With such an influx of buyers, those thinking of selling their property have timed it well.  

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fall in love with the right home…

Buying a home is like falling in love, you can expect to go through the same ups and downs, emotional tugs and pulls, and even similar stages.

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rents rise in the uk!

2019 was a year of recovering rental values following the drop observed in 2018. The DPS (Deposit Protection Service) reports a 1.4% increase in rents in 2019 (Q42018 to Q42019).

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