Posted on

81% of buyers and sellers undeterred by third lockdown

sold

81% of homebuyers and sellers are undeterred by lockdown 3.0, according to new research by Benham and Reeves.

The lettings and estate agent surveyed over 10,000 homebuyers and sellers about their feelings towards another lockdown, its impact on their decision to buy or sell and how they felt about the viewing process while Covid remains a high-level threat.

The results found that athird national lockdown has deterred just 14% of buyers and sellers from a purchase or sale in 2021, with 81% intending to carry on as planned.

In London, 18% stated they would now put their plans on hold, the highest of any region, while buyers and sellers in the North East were the least deterred with just 11% choosing not to transact this year.

Just 4% of those already in the process of selling or buying are putting their transaction on ice until the current lockdown has ended, while 91% of those will carry on, likely spurred by the current stamp duty holiday.

Again, London is home to the highest percentage of those deciding to pull out or delay a sale or purchase (6%), while 96% of buyers and sellers in the North East are undeterred.

While many remain keen to transact, the physical viewings process does pose a concern for the majority. 50% of those asked, stated they didn’t feel safe hosting or attending a viewing while 41% did and 9% preferred not to say.

Attending or hosting a viewing was the biggest concern in Northern Ireland, Scotland and the West Midlands, while those in the North East and East of England felt the safest about it.

Director of Benham and Reeves, Marc von Grundherr, commented: “Homebuyers and sellers remain largely undeterred about transacting despite yet another dose of lockdown restrictions and this is no doubt due to the dangling carrot of a stamp duty holiday that remains in place until March, at the very least.

“Understandably, physical viewings pose a greater concern although the industry remains well-positioned to carry out all stages of the transaction process in a safe and appropriate manner.

For those that are worried, there are things you can do to put your mind at rest. All agents should be sending you their Covid protocols anyway but be sure to request

“Any agent worth their salt will have their house in order where Covid compliancy is concerned. We’ve spent a great deal of time, money and effort to ensure we operate above and beyond the government guidelines as the safety of our clients is paramount. But for those that are still unsure, we also offer the option of video viewings, as we have done for our international clients for the last five years. So while some agents may find it a shock to adapt, we’ve managed to take it in our stride and it’s business as usual as we keep the wheels moving for your sellers and landlords.”

Original Article from Financial Reporter 12/01/2021

Posted on

Capital gains tax could ‘be brought into line with income tax rates’

CGT

Capital gains tax (CGT) increases could be around the corner as the chancellor Rishi Sunak looks to find the money needed to cover the government’s unprecedented spending and borrowing during the pandemic.

Given that the prime minister Boris Johnson has already ruled out a return to “austerity” in public spending, this money will have to come from somewhere.

There has been speculation for some time that CGT rates would increase.

Anthony Codling, CEO, twindig, commented: “As we enter 2021 chancellor Rishi Sunak is reviewing the structure of UK taxes. The pandemic has been costly in both emotional and economic terms, UK government debt is at an all-time high and eventually, these debts will need to be repaid. Taxes are therefore likely to rise.”

CGT is currently charged at 20%, but there are growing calls that it should be increased to 28% across the board or possibly aligned to income tax rates – at up to 45%.

The government’s tax adviser recently recommended that CGT be overhauled with proposals that could see the number of people hit by the duty increase sharply.

Rishi Sunak, who commissioned the review, is considering proposals by the Office of Tax Simplification (OTS), a Treasury-based body, to reform capital gains tax in the light of the economic and fiscal impact of the Covid-19 crisis.

The move has the potential to bring in an extra £14bn by reducing exemptions and doubling rates, according to the review.

Codling said: “Our working assumption is that capital gains tax rates will be brought into line with income tax rates, higher rate taxpayers will therefore pay higher rates of capital gains tax.”

Currently, a taxpayer’s primary residence is exempt from capital gains tax, but this could soon change for some homeowners.

He added: “We do not expect this exemption to be taken away completely, but we would not be surprised if the amount of exempt gain was subject to either an annual cap, a lifetime cap or a combination of both. This would be similar to pension relief where the amount of tax benefit in any one year is capped as well as the taxpayers lifetime tax benefit.

“Second-home and buy-to-let property gains are already subject to capital gains tax at a higher rate [28%] than the capital gains on other assets [20%]. We forecast that these rates will be equalised and reflect the taxpayer’s income tax rates.

“This will mean a tax rate increase for higher rate taxpayers and a lower tax rate for those with earnings below the higher rate tax threshold. However, it is likely that a capital gain on a property will move a lower rate income taxpayer into the higher rate tax bands.”

Original Article from Property Industry Eye 04/01/2021

Posted on

Almost a third of buyers will pull out if they miss SDLT deadline

sale pending

A survey of people currently purchasing property suggests almost a third may pull out if they look likely to miss the stamp duty holiday deadline.

The Guild of Property Professionals surveyed more than 1,000 buyers last week and 31% said they would ditch their potential purchase if completion takes them beyond 31 March, when the holiday is due to end.

While there are over 140,000 more people in the process of buying a new home now than this time last year and an estimated 418,000 homes sales progressing to completion according to Zoopla, with many having been prompted by the stamp duty holiday, there are growing concerns over plans for the re-introduction of stamp duty in April 2021.

There are mounting fears that tens of thousands of property sales could collapse, as buyers struggle to beat the deadline, owed in part to delays in the conveyancing process, after the government confirmed that it “does not plan” to extend the temporary relief offered to property buyers via the stamp duty holiday.

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “If the deadline remains as it is, only a quarter of the sales agreed in January will complete in time. With 140,000 more people waiting to complete sales than this time last year, there will be a significant number of buyers who will have to find additional money for stamp duty if they have not budgeted for it.

“Our hope, and the hope of 71% of the public, was that the government was going to extend the stamp duty holiday, or at the very least, introduce a phasing out period that will ease the pressure on all parties involved, and will prevent a cliff edge.”

More than a third – 38% – said that stamp duty had a big financial impact on the amount they paid, while a further 46% said it had a medium impact on their finances.

The research also found the average value of the property people had bought or were going to buy was £232,500, meaning the average house buyer would face a stamp duty bill of £2,150.

With a third aiming to push through a move quickly to take advantage of the holiday, McKenzie warns many would not have budgeted for this added cost.

He added: “If buyers are unable to complete because of not having the stamp duty money in place, we will see a large number of transactions fall through as a result. In fact, our research showed 83% of those who had moved this year said they would have been likely to cancel or postpone their house move if they had to pay stamp duty, which would have been a disaster for the property industry getting back on its feet after the initial lockdown.

“The signs are there, the stamp duty holiday has been successful, but we need to ensure a smooth transition back to a normal service.”

Original Article from Property Industry Eye 18/12/2020

Posted on

Government says it ‘does not plan to extend’ stamp duty holiday

deadline

The government has confirmed that it “does not plan” to extend the temporary relief offered to property buyers via the stamp duty holiday.

Estate agents, surveyors and solicitors were among those hoping that the chancellor Rishi Sunak would extend the deadline beyond 31 March to help stimulate the housing market next year.

But the Treasury has opted not to extend the stamp duty holiday for property buyers beyond March next year, and it is now feared that this could result in the collapse of almost a quarter of a million property sales, as buyers struggle to beat the deadline, owed in part to delays in the conveyancing process.

More than 23,000 people have signed a petition calling for the stamp duty holiday to be extended for six months after 31 March 2021.

As it received over 10,000 signatures, the government was required to respond.

A spokesperson for HM Treasury said: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The government does not plan to extend this temporary relief.

“The COVID-19 pandemic and subsequent lockdown caused uncertainty for those buying and selling residential property and property transactions fell by as much as 50% during the first national lockdown.

“To stimulate immediate momentum in the property market and to support the jobs of people whose employment relied on custom from the property industry, the Government decided to introduce a temporary Stamp Duty Land Tax (SDLT) relief. This relief increased the starting threshold of residential SDLT from £125,000 to £500,000 from the 8 July 2020 until 31 March 2021.

“Since the relief was introduced, transactions have increased and seasonally adjusted data shows that in October 2020, transactions were 8% higher than October 2019.

“As the relief was to provide an immediate stimulus to the property market, the Government does not plan to extend this relief. SDLT is an important source of government revenue, raising several billion pounds each year to help pay for the essential services the Government provides.

“The Government is committed to supporting home ownership and helping people get on and move up the housing ladder. When the SDLT Holiday ends, the Government will maintain a SDLT relief for first time buyers which increases the starting threshold of residential SDLT to £300,000 for first-time buyers that purchase a property below £500,000. In addition, a new Help to Buy scheme will be introduced from 1 April 2021. This scheme will run until March 2023.

“All tax policy is kept under review and the Government considers the views it receives carefully as part of that process.”

At 100,000 signatures, the petition to extend the stamp duty holiday will be considered for debate in Parliament.

Original Article from Property Industry Eye 17/12/2020

Posted on

Stamp Duty rush causing mental health issues for conveyancers

Mental health

Solicitors’ leaders say members of their industry are suffering mental health problems as a result of the workload to meet the March 31 stamp duty deadline.

They are also urging house movers to have realistic expectations about whether they will or will not complete their transactions ahead of the looming deadline.

“Solicitors are working under pressure around the clock to help their clients move both in time for Christmas and ahead of the SDLT deadline” says Law Society of England president David Greene.

He insists solicitors are struggling to cope with the large volume of emails and telephone calls from clients and estate agents all of whom are understandably anxious to know the current position “but the time spent dealing with such enquiries prevents solicitors from progressing matters.”

Greene says the Law Society has lobbied the government twice on this issue in recent months, urging some kind of extension to cope with the workload.

“The next few weeks are going to be very busy with people wanting to complete their desired move before Christmas and our members know an even busier and more stressful time awaits them up to the end of March.

“Consumers must recognise that it is increasingly unlikely that if they sell or buy their house now, that they will complete by the March 31 deadline. The solicitor is often the last link in the move, and it is only when the solicitor has all the pieces, which they are dependent on obtaining from others, that buyers and sellers can move.”

Greene says the conveyancers are limited in their ability to act by the information they get from other sources, also under pressure – delays in the issuing of search results, delays in mortgage offers being issued, problems in the chain and with dependent transactions.

He adds that these are usually outside the control of the conveyancer.

“It is important that law firms prepare in advance for the avalanche of work that conveyancers are likely to face as the deadline approaches” urges Greene.

“Firms should manage the expectations of new clients hoping to move before the SDLT holiday ends and support must also be provided to solicitors whose mental health is under strain as they work long, unsociable hours.”

Original Article from Estate Agent Today 14/12/2020

Posted on

Housing market rebound starts to run out of steam

prices fall

House prices have increased by 7.6% over the past 12 months, the fastest rate of property inflation in over four years according to Halifax, but there are growing signs that prices will fall in January and February as the post-lockdown boom ends.

The New Year will herald a turning point for the housing market, with a Christmas peak in prices followed by negative growth of -1.2% in January and -2.5% in February 2021, according to the Reallymoving house price forecast.

Collected at the start of the homebuying process, when buyers agree a deal and seek conveyancing quotes, the data provides one of the earliest snapshots of the short-term property market outlook and confirms that the post-lockdown boom will come to an end at Christmas, with prices beginning to decline heading into the New Year.

Based on analysis of purchase price data from 30,000 conveyancing quotes on the price comparison site for home movers between September and November, Reallymoving predicts that the average property price in England and Wales will peak at £352,239 in December, before falling to £343,312 by February 2021.

Rob Houghton, CEO of reallymoving, said: “Our prediction of a New Year change in fortunes for the housing market has been further strengthened by the latest data which clearly shows price growth entering a downward trend in January and accelerating in February.

“The mask is beginning to slip on the two-tier housing market of recent months, which has seen activity from equity-rich homeowners who are less affected by the pandemic, concealing problems at the lower end of the market where First Time Buyers have benefited little from the stamp duty holiday and faced considerable challenges securing higher loan to value mortgages.

“The kind of growth we’ve seen over the last few months was never sustainable. Despite positive vaccine news, which will certainly boost confidence that the end of the pandemic is now in sight, there are significant challenges for the housing market to overcome in the short term, including the end of both the stamp duty holiday and the furlough scheme on 31st March, which is likely to result in further downward movement in prices over the first half of next year.”

Original Article from Property Industry Eye 10/12/2020

Posted on

UK housing market set to exceed 1 million sales in 2020

houses sold

UK housing market on track to exceed 1 million sales this year, the latest figures suggest.

Fresh analysis of data from TwentyCI by Savills shows that the level of residential property sales being agreed have dropped by around 12% since their highs over the summer and early autumn, which in part reflects less fresh stock being brought to the market at this time of the year.  However, they still remain well above levels seen in the same period last year, particularly in the market over £500,000.

HMRC data released last week revealed that 121,740 residential sales were completed in the month of October alone, 24% up on September’s figure and 14% higher than the same month last year.

The figures, which are non-seasonally adjusted, point to the highest monthly level of transactions since March 2016 when investors rushed to beat the 3% stamp duty surcharge, and the highest figure since November 2007.

That suggests the experience of the second lockdown has reaffirmed people’s changed housing priorities, which is likely to support activity through to the end of the stamp duty holiday, according to Savills.

Lucian Cook, Savills head of residential research, said: “The numbers of sales now reaching completion reflects the high levels of sales that were being agreed between the first and second lockdown, when the market was being fuelled by a combination of pent up demand and substantially increased activity from those looking to trade up the housing ladder given their experience of living and working from home.”

Cook added: “While transactions in the year to date are 18% below last year, it now looks as though they will exceed 1m for the year, something pretty much unthinkable six months ago.

“The extent to which progress in securing a successful vaccine impacts on some of the behavioural changes behind the surge in activity levels remains to be seen.  That will ultimately depend on the lasting impact of Covid on our lifestyles.”

Original Article from property Industry Eye 04/12/20

Posted on

RICS concerned about the ‘prospect of a sharp slowdown in transaction activity’

RICS

Residential property sales have continued to increase in recent weeks, but surveyors are expecting a slowdown early next year.

Property buyers have been rushing to benefit from a temporary stamp duty holiday, but with the deadline just over three months away, there are growing signs that demand is “losing a bit of steam” in some areas of the UK, according to the Royal Institution of Chartered Surveyors (RICS).

However, the predicted slowdown in activity levels is not expected to lead to a decline in property prices.

Simon Rubinsohn, RICS chief economist, said: “It is clear from responses to the latest survey that there is considerable concern about the prospect of a sharp slowdown in transaction activity following the end of the first quarter of the coming year.”

He added: “There is little sense that the projected softer sales picture will feed through into pricing which is viewed as likely to prove rather stickier in the face of ongoing macro challenges.”

There are no real surprises in this latest sentiment-based survey from RICS, according to Sam Hunter, chief operating officer of Homesearch.

He commented: “In many ways is reassuring as it completely chimes with what we’re hearing from the coalface.

“Although buyer demand is still strong, according to the agents in our Network, it does seem as though activity has cooled slightly over the last few weeks.

“Whether or not this is as a result of the lead up to Christmas temporarily distracting would-be movers as is the norm at this time of year, or because buyers are now concerned about the ability to complete before the end of March stamp duty deadline is, however, harder to determine.

“Another interesting element is that the overall view from the RICS survey this month appears to be that levels of house-price inflation will cool in the mid-term from the record highs we’ve seen over 2020, albeit that values will maintain a more steady upwards momentum in 2021.

“Again, talking to our agents we’re hearing that prices are topping out in many towns and cities – not as a consequence of buyers refusing to meet asking prices per se, but more due to the concerns of mortgage down vals leading agents to advise their clients to price realistically in order to complete their sale without hiccups, especially if they are aiming to complete in time to save the stamp duty on their next purchase. Until we know if there will indeed be the much-speculated extension, it’s prudent advice.”

Original Article from Property Industry Eye 10/12/2020

Posted on

Stamp duty holiday ‘was never a long-term solution’

stamp duty holiday

The average residential property price has increased by more than £15,000 since June, ‘far outweighing’ stamp duty holiday savings on most properties, Britain’s biggest mortgage lender Halifax said earlier this week.

The stamp duty holiday unveiled by chancellor Rishi Sunak in July has been credited with fuelling a mini-boom in the property market. According to recent figures released by HM Revenue and Customs, a total of 105,630 residential transactions took place in October, with around £1.9bn raised from stamp duty in the third quarter of the year alone.

Halifax’s latest monthly house price index shows the price of an average UK home increased by 1.2% in November to £253,243.

The potential stamp duty holiday saving on the average home is £2,650, while the maximum saving on a property costing £500,000 or more is £15,000.

In comparison to last November, prices have risen 7.6% annually, which is the fastest rate of property inflation since June 2016. The data from Halifax suggests that valuations have soared by a hefty 6.5% since June.

Reflecting on the data, David Hannah, founder and principal consultant of Cornerstone Tax, commented: “The stamp duty holiday introduced by Rishi Sunak earlier this year provided a great boost to the market, which had run stagnant due to the initial lockdown. Whilst it has enabled the industry to avoid the most catastrophic consequences, it was never a long-term solution.

“Throughout other economic crises, stamp duty changes or relief have historically done very little to get the market moving again, and there is no reason why it would help this time around either. It has been and still is a poor tool for managing market behaviour. With low-deposit mortgages almost disappearing altogether, people are having to assess their options.

“The government needs to do more to help get people get on the property ladder; government-backed purchase mortgage guarantees for borrowers would be a great way to reinstall confidence in the lending market. If the term of these guarantees were for five years, for example, the inflation of the housing market during the medium term would wipe off any negative equity on those properties. This would give the market some security again, help buyers, and get the market moving again.”

Original Article from Property Industry Eye 10/12/2020

Posted on

Post Lockdown House Move in Chelmsford? Here’s What to Expect

Post lockdown

In May, the UK government started the process of easing lockdown restrictions. Along with allowing people to exercise outdoors for longer and sunbathe in parks, they also reopened the housing market, which is excellent news for those who have been waiting to move home, and especially those who are keen to sell their property.

If you’re planning on selling your home in Chelmsford, with property market guidance from the Government constantly changing, you may have no idea what to expect. The good news? Essex Homes And Lettings can help guide you through the process to ensure everything is done safely. While the process will be slightly different, there’s no reason why your property sale should be held up if you follow government advice. Here’s what to expect:

You can officially put your house in Chelmsford on the market

It’s now possible to put your Chelmsford property on the market. This means that we can also visit your home (with social distancing rules and PPE in place) to take any photos and videos of the property. However, if you or any member of your household are displaying any Covid-19 symptoms or are self-isolating, please let us know as we will not be visiting the property until everyone is symptom-free.

Have you sold your house? If any of the parties involved in the transaction start to show any symptoms of coronavirus, the safest and smartest thing to do would be to delay the move. Speak to your legal adviser if needed to ensure that your contract is flexible and accommodates for this risk.

Prepare for virtual viewings

Virtual viewings will maximise the number of people you can show your property to without risking anyone’s health. Don’t worry if you have no idea where to get started or are worried you don’t have the right equipment to make this happen! We can help you organise this. 

You can hire removal firms to help you move house

Once your house is sold and you’re ready to move, seek out a good removal company to help. Removal firms are in operation and they can help ensure that your move is carried out as safely as possible following Government guidelines.

Before you vacate your property, clean it all thoroughly. This includes all your belongings that will be handled by movers as well as all surfaces within your home.

Property surveys can be done via appointment

If you didn’t get a chance to get your property surveyed pre-lockdown, it’s now possible to get this done. Arrange an inspection with a surveyor so you can ensure only one person is visiting at a time. All surveyors will be following government guidance and social distancing from all those living in your home. Again, inspections will not be possible in households where someone is showing coronavirus symptoms.

Not quite sure where to find a surveyor? Get in touch with us and we will be able to help you arrange an inspection.

Spruce up your online listing

Although we’re currently in a time of economic uncertainty, demand for housing will slowly but surely increase as things get back to normal. If you’re worried about your property staying on the market for too long, consult us to see what can be done to promote your listing. You may need to do a little home staging to make your listing stand out. 

Take the necessary safety measures to reduce the risk of spreading coronavirus

All house moves and property sales must follow the necessary social distancing and safety rules. From viewings to removals, you can find official government guidance for every step of the process. This includes the following advice:

  • First viewings should be conducted virtually where possible. We can help you arrange this
  • Don’t hold any open house viewings – limit real-life viewings to members of the same household
  • Sanitise all surfaces before any physical viewings. Open all internal doors so door handles don’t need to be touched
  • Provide access to hand sanitiser that viewers can use before they go around the house
  • Vacate your property when viewings are taking place to minimise contact with members of another household

If you’re worried about spreading the virus during the process of your house sale, speak to our expert and friendly team at Essex Homes And Lettings to discuss what extra measures you can put in place. We can be contacted on 01245398466 or sales@essexhomesandlettings.co.uk.