Buying agent Property Vision has accused upmarket agents of shooting themselves in the foot in the wake of the election.
A blog on its site says: “Reading the papers and the gushing euphoria from the mouths of some estate agents, you would have thought that a tsunami of money was washing over the prime property markets.
“We read with interest of hundreds of millions of pounds worth of property being transacted in the wake of the surprise election result and made a mental note to check with the Land Registry in a few months time to check out what had really happened.
“The common thread in the breathless commentary was urgency to get a deal done before prices rise by 20% or more as a wave of money – put off by talk of mansion taxes and hostility to non-doms – breaks over these shores.
“Our experience is rather more prosaic. Of course the banishing of the spectre of a mansion tax is good for transactions. Layers of worry have been removed.
“However, it is our belief that the much greater long-term headwind for our market is Stamp Duty – which is a full-on transaction tax that is almost punitive. Adding a bedroom, buying an expensive pony paddock or digging a basement are so much cheaper than moving.
“The other brake on transactions is, ironically, being reinforced by the cheer-leading estate agents who have got themselves in print for their moment of glory.
“Sellers will read about the 20% ‘increase’ in the value of their property and adjust their asking prices accordingly. And it will take months – if not years – to get them back in the real world.
“It’s called shooting yourself in the foot.”
Comments (5)
Yesterday unemployment was down to 5.8% Mark Carney said interest rate would go up once rates fell below 7%, when they unexpectedly did, whoops 14 months ahead of the election, suddenly the increase didn’t happen. Bit suspect IMO.
Sorry for raising the matter but what happens now the election is over and employment rates are adding inflationary pressure to the economy? Is everything else so stable it won’t happen?
When the Governor BOE flip flops for no explained reason it becomes difficult to know what is going to happen.
Good luck with a 1% rise on a £3,000,000 mortgage.
Have to disagree its a fact in these parts that prices are up since last Thursday, buyers (buy to let and first timers) have been climbing over one another for lower ladder properties, often offering way above asking price. Talking to people, they feel there is a certain stability bought about after no change of main party in Westminster for the next 5 years. If that’s the way it is then why shouldn’t agents say it?
I agree entirely. Whilst it’s good news what happened last week,we are not out of the woods yet. We are still running with some 35/40% less volume than in times gone by. Until more sellers commit to putting their properties on the market,the shortage will put pressure on prices but that will be a false pressure and short lived. It will not give an overall confidence to the market. I am sure prices in the SE will rise this year. We predict by 5/7%. Stamp duty is without doubt a big issue (cost) for many that deters them from moving. But it’s not going away. Stupidly however if the government backed down on that somewhat, I am utterly convinced their revenues (not just stamp duty,but also all the VAT, Tax, NI from the various infustries involved in the buying selling process, and then all of that again from the spend that ensues when people move, eg building,furniture.landscaping,painting, refurbishments etc) would soar as more people took to the market. Could their economists not work that out for them?
We have already had various clients ask about putting prices up on the back of this and we certainly haven’t seen a deluge of new applicants in Surrey and certainly not the top end. I blame the multi millionaire estate agent Gary Hersham!!! oh to have an average fee of 100k………
I agree. In the leafy, but wealthy, home counties – we have seen little change in the prime markets. The fact is that the top rates of stamp duty have killed off a large part of the prime market. A typical UK buyer trading up significantly, does so from £2.5m to £5m. Extra stamp duty on this amount is £300k – and over £500k in total. Those buyers would rather go and buy something abroad instead of paying this unfair tax. This Conservative Government has now aligned itself with the SNP in Scotland who themselves charge 12% as their top rate. I’ve written to my MP reminding him of this uncomfortable fact and asking him to address this matter urgently.