by Linda Nightingale
With house prices increasing, the key to steadying the property market could be first time buyers. Linda Nightingale details the facts and figures.
Recent Government figures show that the average house price in the UK has increased by 4.5% in the year to October 2017, which is slightly down from 4.8% in September 2017.
Whilst the annual growth rate has slowed since mid 2016, it remained broadly around 5% during 2017. On a regional basis, London continued to show the highest average house price at £481,000 followed by the South East of England at £322,000.
As of October 2017, the average house price in the UK was £223,807 with figures showing that property prices have fallen by 0.6% compared to the previous month and risen by 4.5% compared to the previous year.
How may these figures affect the housing market in the South East? Currently there seems to be a gradual increase of properties on the market through agencies and websites, but it is hard to judge what will happen when spring arrives and people want or need to move premises.
Agents rely on property to have a business and lack of ‘stock’ can bring problems. There might be a higher price on properties due to lack of competition from other homes being available. This in turn pushes up the property market values, or in reverse the home doesn’t sell and the few buyers available put in much lower offers if they know the owner is desperate to move. Therefore, lack of homes on the market is something of a double-edged sword.
First time buyers can be the key to a healthy market. What happens at the bottom of the market affects higher end homes, as without complete chains the more expensive properties have to rely on cash buyers or business moves where there isn’t a chain involved. The top end has been, in many peoples’ eyes, hampered in recent years due to high stamp duty liabilities.
Stamp duty is tiered, whilst there are some caveats, in general terms there is no stamp duty payable if the property is valued at up to £125,000. You then pay 2% on the portion up to £250,000, and 5% on the portion up to £925,000 and up from there to 1.5 million its 10% and then 12% on anything over £1.5 million.
For first time buyers purchasing a home for £300,000 or less, stamp duty was abolished by Chancellor Philip Hammond in the 2017 Autumn Statement with immediate effect. FTB’s purchasing properties for between £300,000 and £500,000 do not have to pay stamp duty on the first £300,000 but the difference between £300,000 and £500,000 will be charged at 5%.
Whilst no one can predict the future market, looking at it with a half-filled glass, I like to believe that the market will pick up in 2018 in terms of properties becoming available on the market. After all, who wouldn’t want to live in our lovely home counties!