Pardoes
GTH
Vision South West
Cooper Associates
Crest Nicholson
Ashfords
After much media discussion and lobbying from industry bodies, George Osborne finally announced last week that there were to be real reforms to Stamp Duty with immediate effect and that 98% of buyers will now pay less. On the face of it this was welcome news for large numbers of homebuyers and signalled an end to “one of the worst designed and most damaging of all taxes” (Institute of Fiscal Studies), It is true that many properties faltered or took longer to sell when priced at just above any of the previous thresholds; £125,000, £250,000, £500,000 and £1,000,000 and the ‘slab’ system where the tax was levied against the whole price was a major deterrent for buyers who would trigger a higher rate over these price points.
Overall this has been well received by the industry and buyers alike, although we did have a vendor ring us last Friday morning requesting that their buyers now share half of their ‘windfall’ of £3,000 with them or they were pulling out of the transaction. This was a property that we had agreed a sale on at £330,000 and the buyers would have previously been liable to pay Stamp Duty of £9,900 (ie 3%) and would now under the new rules be £6,500 (up to £125,000 = £0, £125,000 - £250,000 at 2% = £2,500, £250,000 - £925,000 at 5% = £4,000), a saving of £3,400. Needless to say, after some delicate negotiation, the sale is proceeding at the original price!
On balance, whilst some are saying that the savings will drive house prices upwards in the medium term and that as a consequence more people will ultimately pay a higher rate of tax, for the buyers of this part of Somerset, it is very good news!
For more information see www.robertcooney.co.uk
MOVING HOME?, CIRCUMSTANCES CHANGED?
YOU NEED LONG-STANDING LOCAL LEGAL ADVICE YOU CAN TRUST
If you're thinking of moving home or are in need of specialist legal advice, your local community solicitors Pardoes can help.
Residents in Bridgwater and Taunton have enjoyed Pardoes' legal expertise for around 100 years as our friendly, expert staff respond to the needs of you and your family at every stage of life's journey.
We are also right at the heart of your community with branches open throughout the week, which is why we are the number one choice locally. We respond quickly and expertly to ensure you make the right move.
Stamp Duty is just the latest change to which we have been quick to respond. Alison Parker of Pardoes said: "This is a game changer for the housing market and promises to have a huge impact on the market going into the New Year. Pardoes have the legal expertise to guide you through this tax change and the conveyancing process.For more information see www.pardoes.co.uk or pop into one of our local branches.
Alison Parker
New Stamp duty rules – what it means for you
A REVOLUTION in stamp duty means would-be house buyers have been sent an early Christmas present by the Chancellor.
Under the reforms Chancellor George Osborne said 98% of homeowners in England and Wales will pay less than they would have under the previous system. Only people who buy homes worth more than £937,500 will pay more in tax.
Previously Stamp duty charges successively higher rates on the whole of the purchase price meaning sudden hikes in Stamp duty when the price hit the next band.
Under the previous scheme someone buying a home for £250,000 would have paid £2,500, or 1%, in stamp duty. But if the price was £1 more, they would pay an extra £5,000, as they then paid 3% on the whole purchase price.
Under the new system the rates of Stamp duty only applies to the amount of the purchase price that falls within the particular duty band.
Now there are substantial savings to be made. For example a detached family home in Trull Road, Taunton, on the market at £339,950, would save £3,201 in stamp duty.
The saving would be even more for Cuff’s Orchard, a beautiful Grade II listed village house at Isle Abbots - £4,650; while a three bedroom village home near Langport would see a saving of £4,900.
A character barn conversion at Ham, near Taunton on the market at £299,500 would see a saving of £4,001.
For more information see www.gth.net.
“With all the extra challenges we have faced in the mortgage market over the past twelve months, it is pleasing to see a real difference being made for 98% of all homeowners going forward. The stamp duty changes, in particular for those looking to purchase between £250,000 and £350,000 will see real savings in the cost of buying a house. Somebody looking to buy or move at a purchase price of £275,000 would have previously paid £8,250 stamp duty but will now pay £3,750.
“At Vision South West Ltd (01823 462565) we have always maintained that we will never charge clients a fee for arranging or researching a possible mortgage. This means the client can feel safe that there will be no charges unless there is a successful outcome of their purchase or re-mortgage,” said Mike Rogers one of the Directors at Vision.
The changes, although taking effect next year, also allow those going through the purchase of property now to opt into this arrangement if they so wish.
The company has recently invested in their mortgage offering, recruiting two local people into the team. Jo Brown and Andy Govier are well known within the area and have second to none knowledge of the local market. The company is also completely independent and can offer ‘whole of market’ solutions meaning that customers will always get the best mortgage for their needs.
For more information visit www.visionsouthwest.co.uk.
Mike Rogers
The Stamp Duty reform has seen the archaic slab structure move to a progressive system. The new system, structured in the same way as income tax, will see higher rates of Stamp Duty affecting those portions of a property price above each banding. The net effect will be to reduce Stamp Duty for 98p.c of homebuyers. Properties valuing over £937,500 will attract a higher charge than at present.
In a climate where first and next time buyers struggle to raise the upfront costs of a deposit and stamp duty, the change is welcome. However, it must be noted house prices are driven by what buyers can afford. With reduced stamp duty costs, buyers are more likely to offer more for their purchase and so we expect to see the market adjust itself slightly upwards. The new measures must be balanced by a strong supply as house prices are still historically high compared to earnings.
The main effect will be to remove the huge distortion the previous regime has opposed on property prices around each threshold. Typically, we see clusters of properties being sold just under each banding as buyers negotiate to avoid higher rates of stamp duty. It is now logical to expect a more even distribution of prices throughout the market.
For more information visit www.cooperassociatesltd.com.
Stamp Duty helps house-hunters in Somerset save money ahead of Christmas
House-hunters across Somerset are set to save money on buying a new home with the recent reduction on Stamp Duty. Award-winning housebuilder Crest Nicholson, which has developments in Taunton and Somerset, is urging prospective purchasers to get in touch to find out just how much more affordable their dream home has become.
Bishop’s Brook
Sat in the heart of rural Somerset, in the historic city of Wells, Bishop’s Brook offers an exquisite collection of high-specification two, three, four and five bedroom homes that are stunningly designed in a traditional style to reflect the character of the surrounding architecture, while still offering all the modern comforts you’d expect with a new build home.
Prospective homebuyers looking to get a feel for the lifestyle on offer at Bishop’s Brook can now tour the development’s four bedroom Westerleigh show home. This impressive three storey town house is designed with growing families and entertaining in mind. On the ground floor, house-hunters will find the large open-plan kitchen / breakfast room, complete with bay window and French doors onto the garden, as well as a separate dining room and cloakroom. The first floor is home to the spacious living room, again boasting a bay window, and the light and airy master bedroom with en-suite shower room. Three further double bedrooms can be found on the second floor, including a second bedroom to rival the master, as well as the family bathroom. Using Help to Buy, prices for a four bedroom home at Bishop’s Brook start from £228,000.
Firepool Lock
Situated alongside the Bridgwater and Taunton canal, Firepool Lock boasts an impressive collection of one and two bedroom apartments, and three and four bedroom houses. But the jewels in this development’s crown have to be its stunning waterfront villas. Set over three floors, the villas enjoy a combination of south-facing decks, balconies and roof-top terraces from which to take in the scenic waterway.
House-hunters looking to move to the area can tour the Chiswick show home now. Open to the public daily from 10am to 5pm, this contemporary town house benefits from large picture windows throughout, as well as French door access to a terrace from the spacious kitchen / dining room and sliding doors from the second floor living room onto a breath-taking roof terrace. This exceptional family home offers three well-proportioned bedrooms, including a master-bedroom with shower en-suite and balcony overlooking the canal. Using Help to Buy, prices for a two bedroom apartment start from £123,160, and prices for a three bedroom Chiswick town house start from £247,960.
As well as the reduction in Stamp Duty, Crest Nicholson also offers a range of schemes to make purchasing a new home easier and more affordable, from Part Exchange to Help to Buy.
Rebecca Gripton, Sales Manager at Crest Nicholson South West, commented: “The reduction in Stamp Duty is great news for househunters in the region, especially ahead of Christmas. The New Year is often a time when people start to consider a move and being able to save money on costs like Stamp Duty can make a real difference. So if you're looking for a new home, why not pop in and speak to the teams about your dream home.”
For more information, visit www.crestnicholson.com/firepoollock or www.crestnicholson.com/bishopsbrook.
Stamp Duty Land Tax Reform and how it will affect the property market.
The new stamp duty land tax (SDLT) regime is finding favour across the industry. It will have an initial economic benefit this month with those purchasers who are likely to use their unexpected tax saving on Christmas shopping.
In the New Year the far more equitable rules should assist the majority of the local property market. It will be most beneficial for those properties that previously clustered around an artificial barrier of £250,000 due to a difference in paying SDLT at a rate of 1% or 3%.
At a purchase price of £250,500 the two schemes work as follows:
Old scheme £7,515 tax
New scheme £2,525 tax
Saving under the New Scheme £4,990.00
The property market has seen a level of growth since the end of the recession. This has been primarily due to the appeal of properties below £250,000 to a significant range of buyers; from First Time Buyers to career landlords and investor buyers. The removal of this barrier should create a more sustained growth in the market over a wider range of property values and ultimately benefit the whole economy.
Enquiries please contact
Victoria Saunders,
Partner
Ashfords LLP
01823 232341.
