The recent changes to Stamp Duty Land Tax can only be regarded as a positive for homebuyers. But on the other side of the coin are rocketing interest rates, which are predicted to rise still further.
This all makes for uncertainty in the housing sector, and there are predictions that house prices could fall and the market flatten off. That said, at Optimum we are still seeing a steady stream of enquiries for our conveyancing services, and we believe it is too early to predict how the market will respond.
And there is positive news. For cash buyers, not reliant on mortgages, now could be a good time to move. Some sales may fall through and house prices may level off. This all means, there is likely to be an increasing amount of housing stock available – a noticeable contrast to the shortage we have seen in the last two years.
For mortgage holders and those applying for borrowing, however, the changes in Stamp Duty Land Tax are unlikely to mitigate the interest rate rise.
As a reminder, the residential nil-rate tax threshold for SDLT rose from £125,000 to £250,000. The nil-rate threshold for First Time Buyers’ Relief increased from £300,000 to £425,000 and the maximum amount that an individual can pay while remaining eligible for First Time Buyers’ Relief increased to £625,000.
In 1990, the average income was £20,480 and the average UK house price was £57,000. Fast forward to 2020, and comparative figures were £37,100 and £237,000 respectively – and we all know house prices have risen still further since then. The differential speaks volumes.
However, as the saying goes, with every crisis there is an opportunity and if you are looking to move and would like conveyancing advice, please contact the Optimum legal team.