ChrisB

Coming up to the budget and Rightmove.co.uk says prices are up 2.9% in the past month.

So there's talk on a 2% stamp duty on £150k to £250k. One quote on the Beeb reckons "First time buyers have been dissuaded from buying because of stamp duty," said Jason Clarke of the Halifax."

Do you think that rings true?

How else could they try to control prices? Higher interest rates?

what would scooby do

They don't control the interest rate so that's out of the window..

More affordable housing and cuts in immigration should slow the demand for stock

Boost II

iTrader: (1)

Removing the exemption of capital gains tax from a primary residence is being considered - this would throw a bucket of cold water on the housing market I would imagine?

Graz

Given the current decrease in the number of first time buyers the above measure has its pros and cons.

It may encourage sellers to keep their prices lower especially if they can remain below a £150k stamp duty ceiling. This will make the property more attractive to the first time buyer.

However for someone in my current situation looking towards a first time buy in the south west there isn't much below £150k. An added 2% just makes it an even less attractive proposition.

I have heard a theory that with less and less first time buyers the housing market will eventually stagnate. It is the first time buyers that keep the markets fluid by stopping long chains from occuring. Ultimately if no one can sell then the prices will have to drop thus bringing the first time buyers back into the market to get things moving again.

Well putting the interest rates up is one option but I guess this has knock on effects to other areas of the economy. From my perspective as a saver and potential first time buyer I would like them to go up in the near term. I get better returns on my savings and the house prices stop increasing so quickly (and possibly drop) so eventually I will be tempted to cash in my savings and invest it in bricks and mortar.

There is a massive push to build more housing at the moment. I can't ever see supply outstripping demand but with the current situation where a load of potential first time buyers are put off because of the overly inflated housing prices I can see a situation where developers have a load of new homes that they are unable to sell in the short term. Envitably they will have to reduce there prices to get things moving.

Graz.

OllyK

Yes there is a big push to build something like an extra 40K house per year (or that may be over the next x years). The interesting thing that I read however, was the government based it figures on estimates prior to the last census. The last census then idicated that there are far fewer first time buyers than were estimated and so the estimate on the amount of housing required is way over the top.

As for extra stamp duty at the £150K level, yes people may try and keep below that to a point, but it then means they will be short on the house they may want to move to. So people will start staying where they are an extending properties to give themseleves more room. I am looking to move this year and that is one of the big considerations is that in the longer term there is space to extend rather than trying to sell and find something bigger.

suprabeast

the governments answer to everything is to just tax it.

That really pisses me off!

milo

more to the point is WHY should they control prices. i just wish they'd leave the free market to decide.

houses were sorely underpriced for many years, and with more and more people in the country, demand will continue to rise. even tho it seems REALLY weird as to how people are affording houses... they are definitely still able to. first time buyers DO seem able to buy houses at the prices they are currently.

other than forcing (probably mostly lower income) people to live in rented accomodation or not move house at all (and in a way crippling the economy), there's not a whole lot market intervention would do.

ProperCharlie

agree with milo - the market will control itself once house prices get above what the market can support. people forget that the idea that every 20 something should have their own house/flat is a recent idea. people used to live with their families at least until they got married and sometimes after that, too. when my family first moved to london (1979) we lived in a bedsit. after a few months we also got the room next door to the bedsit, so we had 2 rooms. i don't remember feeling that this was particularly undesirable, but then i was only 6 years old.

Tiggs

there are plenty of first time buyers...they are just getting older ( i think 27 is now average)

PPPMAT

While ever lending rates remain at historic lows the cost of housing will be higher. Borrowing 4 times your salary at 5% is still better than borrowing 3 times your salary at 9%.

When the ratio ceases to become affordable at all, then there will be a price 'readjustment' If you look at the last housing crash it took over three years for the market to hit rock bottom so don't hold your breath.

The first time buyers houses are being bought for buy to let operators. However, in many locations the price increases have been such that this is no longer a viable form of investment. When all the new landlordds realise this, it will be the beginning of the slide in prices.

Trust me....

Luan Pra bang

They should just allow building on farm land. Farmers don't make money anyymore so lets turn all those acres of empty land into beautiful housing estates. Most of the farmers I know would be very happy to turn their farms into lovely new estates called The Maltings with five or six different types of houses repeated over and over again.

Goochie

Speaking as someone who bought a house for the first time last year I can say that stamp duty diddnt affect my thoughts on what I could and couldn't afford. I would have thought this is true for most first time buyers.

When you're looking through estate agent windows at the prices you tend to look for houses that are at the maximum ammount your lender will allow. After all, some lenders even pay stamp duty for you as a first time buyer.

I think it would have a greater affect if estste agents were made to include stamp duty in the price they show. Just like shops include VAT in their prices.

dsmith

Leave principal residence alone. Leave stamp duty alone (or increase starting band).

Impose extra tax on "buy-to-let". Its this thats really squeezing FTB out. If there were some significant extra tax on people buying second,3rd,4th homes etc it would free a whole heap of affordable housing up.

Deano

David Lock

1) I think UK population is actually falling and it is the modern social structure/family relationships that demand more houses.

2) Ease planning laws so it's much easier and quicker to build on brownfield sites. Coupled with this take a positive stance about government owned land e.g MOD that is redundant and could be used for housing i.e the department would have to prove that they need it or else it is sold for development.

3) May be they could be more pro-active about empty properties by putting some sort of pressure on landlords to either sell or let out (presumably through the tax regime)

4) I personally think Stamp Duty is more about raising some £££££s rather than controlling the housing market.

5) Also need to question whether property is actually more expensive than it used to be? Any economists on here?

6) What I see in most housing developments in SE is 3/4 bed executive type homes (250k upwards) with only a token gesture towards the 1/2 bed flats/houses for first time buyers or retired folk. That situation could be changed by government and/or local authorities.

Or just let the market forces work it out as said above although that may bring some social problems. DL

ChrisB

By the way, I'm not advocating any particular solution, just interested to see if people think market forces should be left alone or it needs the government to stick their oar in.

PS. Luan, stop trolling please

RON

All very interesting stuff, there was an article in one of the rags today about john precott proposing anew building reg to say that all new homes must have a downstairs bedroom, so, that means that smaller houses would have to be bigger, therefore using more land, which surely means that the prices would go up, making it even harder to get a small home to get on the ladder, sounds barmy to me!!!!

Philip Attaway

I'll tell you barmy.

Had my two bed flat in North London valued today by two different estate agents as we fancy a garden and off street parking.

£50,000 difference in the two valuations

£50,000!!!!!!!!!

Realisticly my property is in a London proffesionals first-time-buy bracket but just goes to show that they must be just taking the **** at what they will market a property for.

Phil

PS Anybody want to buy a flat

RON

Thats far from uncommon, we had valuation from 200k, to 285 within a week of each other, thats for a 'picture postcard' thatched cottage in Dorset, still haven't sold it 11 months on, and now priced at 250!!!