How far will house prices fall [volume 5]
Discussion
P1ato said:
It's a horrible tax that restricts the mobility of the workforce, and if you have nightmare neighbours you have to pay thousands to get away from them.
It must also be one of the taxes thats been allowed to grow the most.In the 1980s, stamp duty was a flat 1% on properties over £60k, nothing on those below.
Nominal property values must be up at least 10x since then, yet the minimum threshold has only doubled AND there is escalation after that.
I think it should be a tax on investment only, not a tax on people moving their own homes.
Shnozz said:
I would argue your statement was not only career specific, but location specific. Whilst in that there London the wages have grown, in the regions I don't think that is true. Only yesterday did I get a recruiters email offering a host of NQs - 5 years PQEs and I was surprised at how little their salary demands were. £34k for a 3 yr PQE as an example.
Sure, but we all know this thread is London focussed 
In the regions, salaries have definitely creeped up over the last few years, but not at the same exponential rate of growth as in London. 34k for a 3PQE isn't great, but a 3PQE at a decent corporate outfit in Newcastle/Manchester/Edinburgh/Bristol should be closer to 50k.
V6Alfisti said:
Indeed, it may also look like they are helping the market (assuming it happens) but it will all come down to timing.
Having a quick read of property experts commentary the picture is really mixed i.e
1) It has already paused the market as people put chains on hold, lots of concern about long this pause will be and it's timing with when furlough ends
2) It clearly doesn't really help anyone looking over the £500k mark i.e large swathes of London
3) It was apparently there to help the flow of large properties getting onto the market, so the older generation can sell up and move into smaller properties with less of a penalty
4) There is a view that prices of properties above that £500k mark will suffer, particularly if within 10% ....as people will be asking for £500k. In the same way there is a barrier to some of buying a place over £925k/£1m given the quick ramp up in stamp duty (£10k per £100k)
5) General view that it won't help estate agents, as they are more greatly benefited by volume rather than a few % on a house price
6) Some saying it will help the sub £500k, others saying it makes little difference as it's quite a marginal bung, particularly as there is fear of job losses, a few grand saved in stamp duty doesn't cover the loss of a job
7) It seems to be a smaller incentive than I imagined, lots of people are calling for a higher limit or to change the higher bracket stamp duty back to what it was (given it has killed mobility/volume).
7) The point you mention about the loss of tax revenue - some find the timing odd
8) Some are saying this feels like the gov are trying to show they are supporting housing, but not really doing very much of any substance
Just a bit meh, unless it gets the older generation out of the larger family homes (thus increasing supply), but again time will tell how all of this plays out.
Not sure on the points in bold, it would depend on how a stamp duty blackout on up-to £500k was implemented. If the 0% band is extended from £0-£125k to £0-£500k and then the existing 5% rate continues from there to £925k and then 10% and 12% above as now then all properties would benefit and it would avoid the pitfalls of the old slab system.Having a quick read of property experts commentary the picture is really mixed i.e
1) It has already paused the market as people put chains on hold, lots of concern about long this pause will be and it's timing with when furlough ends
2) It clearly doesn't really help anyone looking over the £500k mark i.e large swathes of London
3) It was apparently there to help the flow of large properties getting onto the market, so the older generation can sell up and move into smaller properties with less of a penalty
4) There is a view that prices of properties above that £500k mark will suffer, particularly if within 10% ....as people will be asking for £500k. In the same way there is a barrier to some of buying a place over £925k/£1m given the quick ramp up in stamp duty (£10k per £100k)
5) General view that it won't help estate agents, as they are more greatly benefited by volume rather than a few % on a house price
6) Some saying it will help the sub £500k, others saying it makes little difference as it's quite a marginal bung, particularly as there is fear of job losses, a few grand saved in stamp duty doesn't cover the loss of a job
7) It seems to be a smaller incentive than I imagined, lots of people are calling for a higher limit or to change the higher bracket stamp duty back to what it was (given it has killed mobility/volume).
7) The point you mention about the loss of tax revenue - some find the timing odd
8) Some are saying this feels like the gov are trying to show they are supporting housing, but not really doing very much of any substance
Just a bit meh, unless it gets the older generation out of the larger family homes (thus increasing supply), but again time will tell how all of this plays out.
Edited by V6Alfisti on Tuesday 7th July 08:25
For example a property near the £500k mark at £525k would have it's stamp duty reduced from £16,250 to £1,250.
SunsetZed said:
Not sure on the points in bold, it would depend on how a stamp duty blackout on up-to £500k was implemented. If the 0% band is extended from £0-£125k to £0-£500k and then the existing 5% rate continues from there to £925k and then 10% and 12% above as now then all properties would benefit and it would avoid the pitfalls of the old slab system.
For example a property near the £500k mark at £525k would have it's stamp duty reduced from £16,250 to £1,250.
Yes it will depend on exactly what Rishi outlines. However I thought most of the papers were reporting that it would it be stamp duty free for properties up to £500k. https://moneyfacts.co.uk/news/mortgages/stamp-duty...For example a property near the £500k mark at £525k would have it's stamp duty reduced from £16,250 to £1,250.
If they make it a blanket free stamp for the first £500k of any house prices, then that won't suck in the value of the those prices close/above the £500k mark.
However the difference is still quite minor for higher value properties i.e a £1m place is £44k stamp duty, taking out the £15k from that is certainly welcome but countered against the high risk that is currently running. It's almost not a consideration (but again it will depend on area, street e.t.c)
Edited by V6Alfisti on Tuesday 7th July 10:24
V6Alfisti said:
SunsetZed said:
Not sure on the points in bold, it would depend on how a stamp duty blackout on up-to £500k was implemented. If the 0% band is extended from £0-£125k to £0-£500k and then the existing 5% rate continues from there to £925k and then 10% and 12% above as now then all properties would benefit and it would avoid the pitfalls of the old slab system.
For example a property near the £500k mark at £525k would have it's stamp duty reduced from £16,250 to £1,250.
Yes it will depend on exactly what Rishi outlines. However I thought most of the papers were reporting that it would it be stamp duty free for properties up to £500k. https://moneyfacts.co.uk/news/mortgages/stamp-duty...For example a property near the £500k mark at £525k would have it's stamp duty reduced from £16,250 to £1,250.
If they make it a blanket free stamp for the first £500k of any house prices, then that won't suck in the value of the those prices close/above the £500k mark.
However the difference is still quite minor for higher value properties i.e a £1m place is £44k stamp duty, taking out the £15k from that is certainly welcome but countered against the high risk that is currently running. It's almost not a consideration (but again it will depend on area, street e.t.c)
Edited by V6Alfisti on Tuesday 7th July 10:24
Understood on the million pound properties but for others such as ourselves who were looking at moving in maybe 18 months time to a property at £600k-£650k then it would be enough of a consideration that we would start looking now instead.
SunsetZed said:
That is what's being reported but there's no information yet on properties above that indicating that they will or won't be impacted.
Understood on the million pound properties but for others such as ourselves who were looking at moving in maybe 18 months time to a property at £600k-£650k then it would be enough of a consideration that we would start looking now instead.
Absolutely will certainly make some difference to those closer to that £500k mark if it did.Understood on the million pound properties but for others such as ourselves who were looking at moving in maybe 18 months time to a property at £600k-£650k then it would be enough of a consideration that we would start looking now instead.
Pit Pony said:
Given the possibility of remote working in future will lots of people start to move to the North and occassionally commute to London for the day?
Already happens, I know 3 people who do it. The East Coast main line is great. One commutes in on a daily basis for a day or two from Nottinghamshire, one goes from Leeds for 2 days and stays overnight in a hotel and the other commutes 3 days a week daily from York. It can be less than 2 hours from York to Kings Cross. 2 of the 3 are officially London based, so will get the increased salaries, but pay northern property prices.
Will be interesting to see how the Scottish government react. We're very shortly completing on a £460k house in Edinburgh which already comes with a hefty £6k tax premium compared to England (£19k vs £13k). If that regional difference grows to £19k things really are getting out of hand up here.
soxboy said:
Pit Pony said:
Given the possibility of remote working in future will lots of people start to move to the North and occassionally commute to London for the day?
Already happens, I know 3 people who do it. The East Coast main line is great. One commutes in on a daily basis for a day or two from Nottinghamshire, one goes from Leeds for 2 days and stays overnight in a hotel and the other commutes 3 days a week daily from York. It can be less than 2 hours from York to Kings Cross. 2 of the 3 are officially London based, so will get the increased salaries, but pay northern property prices.
It's likely okay for someone who's well established in a career and role, but for most, jobs change and as we've seen, circumstances can change. Moving an (expensive) commute away from where one works on the basis they will always have a role that supports only being in a London (or similar) office only 1 or 2 days a week, or a company that will finance the travel and overnight costs, is risky.
For some London workers it's feasible, for most it's not.
NickCQ said:
Andy20vt said:
Incidentally has anyone noticed that social housing these days, particularly schemes in Manchester, Sheffield etc, seems to be of far better design and quality (better use of space and light) than the utter s
t put up by Persimmon, Wimpey, Bellway etc, etc. in the private buyers market?
You are not wrong there. It's easy to forget given how badly so many 60's concrete estates have aged, but we do have a bit of a tradition in this country of architecturally interesting social housing with utopian design ideals. When you were trading up from a Victorian slum dwelling it must have seemed pretty good.t put up by Persimmon, Wimpey, Bellway etc, etc. in the private buyers market?Iirc they have pretty stringent specs for builders re property sizes, room sizes, eco stuff, materials , disabled access etc that builders have to comply with
Private builders don’t have the above and will build as cheaply as possible
SunsetZed said:
V6Alfisti said:
Indeed, it may also look like they are helping the market (assuming it happens) but it will all come down to timing.
Having a quick read of property experts commentary the picture is really mixed i.e
1) It has already paused the market as people put chains on hold, lots of concern about long this pause will be and it's timing with when furlough ends
2) It clearly doesn't really help anyone looking over the £500k mark i.e large swathes of London
3) It was apparently there to help the flow of large properties getting onto the market, so the older generation can sell up and move into smaller properties with less of a penalty
4) There is a view that prices of properties above that £500k mark will suffer, particularly if within 10% ....as people will be asking for £500k. In the same way there is a barrier to some of buying a place over £925k/£1m given the quick ramp up in stamp duty (£10k per £100k)
5) General view that it won't help estate agents, as they are more greatly benefited by volume rather than a few % on a house price
6) Some saying it will help the sub £500k, others saying it makes little difference as it's quite a marginal bung, particularly as there is fear of job losses, a few grand saved in stamp duty doesn't cover the loss of a job
7) It seems to be a smaller incentive than I imagined, lots of people are calling for a higher limit or to change the higher bracket stamp duty back to what it was (given it has killed mobility/volume).
7) The point you mention about the loss of tax revenue - some find the timing odd
8) Some are saying this feels like the gov are trying to show they are supporting housing, but not really doing very much of any substance
Just a bit meh, unless it gets the older generation out of the larger family homes (thus increasing supply), but again time will tell how all of this plays out.
Not sure on the points in bold, it would depend on how a stamp duty blackout on up-to £500k was implemented. If the 0% band is extended from £0-£125k to £0-£500k and then the existing 5% rate continues from there to £925k and then 10% and 12% above as now then all properties would benefit and it would avoid the pitfalls of the old slab system.Having a quick read of property experts commentary the picture is really mixed i.e
1) It has already paused the market as people put chains on hold, lots of concern about long this pause will be and it's timing with when furlough ends
2) It clearly doesn't really help anyone looking over the £500k mark i.e large swathes of London
3) It was apparently there to help the flow of large properties getting onto the market, so the older generation can sell up and move into smaller properties with less of a penalty
4) There is a view that prices of properties above that £500k mark will suffer, particularly if within 10% ....as people will be asking for £500k. In the same way there is a barrier to some of buying a place over £925k/£1m given the quick ramp up in stamp duty (£10k per £100k)
5) General view that it won't help estate agents, as they are more greatly benefited by volume rather than a few % on a house price
6) Some saying it will help the sub £500k, others saying it makes little difference as it's quite a marginal bung, particularly as there is fear of job losses, a few grand saved in stamp duty doesn't cover the loss of a job
7) It seems to be a smaller incentive than I imagined, lots of people are calling for a higher limit or to change the higher bracket stamp duty back to what it was (given it has killed mobility/volume).
7) The point you mention about the loss of tax revenue - some find the timing odd
8) Some are saying this feels like the gov are trying to show they are supporting housing, but not really doing very much of any substance
Just a bit meh, unless it gets the older generation out of the larger family homes (thus increasing supply), but again time will tell how all of this plays out.
Edited by V6Alfisti on Tuesday 7th July 08:25
For example a property near the £500k mark at £525k would have it's stamp duty reduced from £16,250 to £1,250.
AyBee said:
Surely it can't be a huge jump from £0 below to the existing level above £500k? Had an offer accepted at just over £500k yesterday so will be watching this closely.
I would be very strange if it did, because they have gone to some lengths to reform that type of sudden difference.Under the old system, it was 1% up to £250k and 3% on the full property value over that, meaning that a £249k sale came with a tax bill of £2,490 while a £251k sale would generate a £7,530 bill.
That was enough to kill the market between £250k and £300k in those days, so a £15k differential at £500k would likely to do the same.
They'd be doing this to increase/prop-up property prices across the board, so it wouldn't make sense to drag certain properties down in value.
What I find fascinating is that the government response to the largest economic meltdown in 300 years appears to be support the property market which has been page 1 of the playbook since Thatcher. It really is a rigged market, with landlords and homeowners being constantly bailed out.
I can see properties in the suburbs just under £500k being snapped up quite quickly if the rumours are true.
City centre living will always appeal the the young.
I can see properties in the suburbs just under £500k being snapped up quite quickly if the rumours are true.
City centre living will always appeal the the young.
Earthdweller said:
I used to work quite closely with the social housing providers in Manchester and some of the new properties are very nice
Iirc they have pretty stringent specs for builders re property sizes, room sizes, eco stuff, materials , disabled access etc that builders have to comply with
Private builders don’t have the above and will build as cheaply as possible
Maybe it would be wise for building regs to be changed so that private builders have to comply with the same criteria? I can't think of any other industry that has so spectacularly failed to innovate as the UK's big house builders.Iirc they have pretty stringent specs for builders re property sizes, room sizes, eco stuff, materials , disabled access etc that builders have to comply with
Private builders don’t have the above and will build as cheaply as possible
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