Just Writing

Homebuyers need to act quickly if they want to move home before Christmas and avoid extra costs from the re-introduction of the Stamp Duty threshold.

With the Christmas just over two months away, the ELPG has said that time is running out for canny buyers to secure a property to ensure they can spend Christmas in their new home and steer clear of Stamp Duty burdens.

Steve Spence, senior partner at Neilsons, said: “It takes between five to six weeks to complete a mortgage application and make all of the necessary arrangements required to buy a new home. Therefore, time is running out if you want to ensure that you buy your new property this year and move in before the festive period.

“Likewise, if you have a property to sell, you really have to get it on the market now if you are looking to dovetail your sale transaction with a purchase. Winter is a busy time for the property market and, with buyers likely to be looking to make a quick sale, you should have your home on the market to take advantage of this demand.”

The ELPG, which consists of five of the leading property solicitors in Edinburgh, believes that Gordon Brown’s decision to reintroduce the bottom tier of Stamp Duty from January 1st will also help stimulate activity in the market, as buyers try to avoid the charges by securing a home before the deadline.

Angus Macpherson, managing partner with Drummond Miller, said: “As the Government has announced that the Stamp Duty threshold will be coming back into effect on properties that sell for between £125,000 and £175,000, there is an extra incentive for buyers to make their move now.

“From January 1st, buyers will face paying an extra 1% in Stamp Duty on these properties, meaning that they could be forced to spend up to £1750 on top of the price of their new home. Therefore, anyone who wants to avoid this charge needs to act quickly and buy a new property before the end of the year.”

John Lints, senior partner at the Lints Partnership, added: “It’s likely that the reintroduction of Stamp Duty will encourage a lot more activity in the property market over the winter.

“Sellers know that there will be a lot of potential buyers looking to avoid paying Stamp Duty over the next few months, and this may encourage them to try for a quick sale. After all, it makes sense for them to try to ensure they sell their home before the end of the year, rather than risk the buyer losing interest after Stamp Duty comes back into effect.

“We’ve seen growing confidence in the property market in recent months. Sales volumes and house prices are up on their figures from last year and the conditions are still very good for would-be buyers.

“If you have the funds in place to make a purchase, you should look to do so now to secure a new home at a good price.”

Aborted Sales at 29% For June

The Quick Move FTI* falls for the fourth month in a row.

So are we witnessing a recovery? Well the answer is yes and no.

Yes some homeowners are now prepared to sell and there are some buyers out there. This is a response to the availability of mortgages improving slightly and the rate of price falls easing. Which has in part help reduce the number of sales aborting.

However we are still a long way off a healthy market. According to the HMRC there were just 65,000 property sales in June compared to 140,000 in the same month in 2007. With prices expected to continue falling in the short to mid term we are still a long way off a true recovery.

Unfortunately if recovery is measured by historic average transaction levels alongside prolonged price increases then we are looking at years and not months before a true market recovery.

*This figure is based on property sales that are professionally qualified and managed and the true rate of fall through on the open market is unfortunately much higher.

Aborted Sales at 30% For May

The Quick Move FTI continues to fall as the housing market stutters into life.

We have gone through one of the fastest and deepest property declines in history. With prices falling so rapidly and mortgages difficult or impossible to secure many buyers/sellers were scared off and put their move plans on hold.

With a slight easing of mortgage availability and buyers who now need to move (work relocation, increasing family size etc.) we are seeing a few more potential buyers. However due to the market many sellers took their property off the market leading a slight lack of supply.

With less choice it means that buyers are less likely change their mind and/or swap properties reducing aborted house sales. While there is a disparity in demand and supply we would expect fewer aborted sales.

Aborted Sales at 33% in April

The Quick Move FTI continues to fall with the lowest recorded figure for 19 months.

Although at least 1 in 3 sales* will still fall through this is a big improvement on last year and represents some good news for once.

So does this mean the property market has turned a corner? Unfortunately not, we believe that what we are seeing is cash rich buyers re-entering the market as prices fall. These are generally serious, confident buyers with secure finance so the number of aborted sales is falling.

With large deposits required and strict underwriting criteria it is proving difficult to get an affordable mortgage, so the vast majority are still unable buy. This stemming of demand has inevitably led to continued price falls which only further discourages buyers.

Until demand returns and competition for property increases we are going to see low sale volumes and falling prices. We expect the market will continue to deteriorate with a real recovery a long way off.

So finding a buyer remains the overriding problem, although if you are lucky enough to do so you are less likely to lose that buyer before completion.

*This figure is based on property sales that are professionally qualified and managed and the true rate of fall through on the open market is unfortunately much higher.