What is the property you’re buying really worth?
The stamp duty holiday has backfired, and almost everywhere are paying more for homes rather than less. Stripe Homes analysed house price growth since the introduction of the stamp duty holiday in July of last year across 18 major cities in England and how this compares with the saving via the tax reprieve.
A hot topic I am repeatedly asked about in the current market and period of time before the Stamp Duty Holiday the chancellor has set for the end of June 2021. As you are aware, you won’t pay stamp duty on properties valued up to £500,000. From 30th June 2021 to 30th September 2021, the nil rate band will be reduced to £250,000, returning to normal levels. The laws of supply and demand in a property market with a general lack of stock may inflate prices, so are there other factors in addition in addition of the stamp duty holiday? I have been undertaking numerous residential valuations for clients. Before exchanging contracts in many cases, my clients suspecting agents of fuelling the property market by overvaluing property above and below £500,000. Mortgage applications and surveys are reportedly suffering delays amid backlogs and staffing issues in an attempt to meet the deadline. Provided with comparable evidence from the Land Registry within the last three months has been very helpful to buyers to understand what their property purchase may be worth. We always make a capital cost allowance when valuing properties with modern high levels of finish against those requiring a complete overhaul.
The Times reported on 8 April 2019, following their research, that several leading estate agents, including Foxtons, Chancellors, Hamptons International, Romans and Barnard Marcus, have been over-valuing homes by up to a fifth to win instructions while also charging some of the highest percentage fees. Foxtons, who set a 3% sales fee, are highlighted the most within the article, revealing they reduced two-thirds of their listings before a sale. The report also claims that the ten agents who overvalue the most charge twice as much on average as the ten agents who overvalue the least. Two of the agents named in the report, Foxtons and Chancellors, both said they “price properties competitively” and “strive to get the best price for their customers”. The NAEA told The Times it agreed that the research did not “put the industry in a good light”. With the end of June stamp holiday a month away, we would be happy to advise anyone close to exchanging contracts what their property may really be worth.