Rantings of a disgruntled London Property Finder

Today we spent the day out of the office at the IOD annual convention, in the Royal Albert hall.  Politicians never confirm until late in the day so Alistair Darling late entry as the first speaker was an interesting start to the day.

Given the audience, the Chancellor’s principle objectives were to defend the need for additional taxation particularly the new 50% tax  and also shouting about all the concessions and help the government is giving to smes.

Justifying the need for additional taxation, our hearts bled to hear Alistair Darling bemoaning the enormous hole in govenment revenue since the beginning of the recession due to amongst other things, the fall in stamp duties collected.Rather an interesting point to make to a hall full of business people, given that during these difficult times we need to make pragmatic decisions every day. For example, whether it is better to have a proportion of a little or all of nothing.

The Chancellor has missed a trick with stamp duty. Reducing the rate of stamp duty payable on properties below 500K would have helped boost transaction numbers which could in turn have boosted the revenues the government gains from property and boosted confidence in the property sector and the economy as a whole.  First-time buyers who we work with, tend to buy properties worth £400,000 and above.  Assuming they don’t spend over half a million, that means stumping up 3% stamp duty or using one of the avoidance schemes.  For the many who don’t have helpful accountants or London Property Finders like me, that means finding an additional £13,500 for a flat purchased for £450,000 – the price of a good 2 bed flat in a great area in London.  Typically we will charge just short of £7,000 for finding the fabulous flat – but then we would have introduced the buyer to property they would never have found on their own and negotiated a great deal which won’t fall through.  What does the Chancellor do?

Temporarily cutting stamp duty by half for property below £500K would make a real impact on the London property market and the Chancellor would gain a little of alot rather than a great deal of very little!This London Property Finder thinks it would have been a welcome if pragmatic course of action

Technorati Tags: First time buyers, London Property Finder, London property market, london property market news, Stamp Duty

Tags: First time buyers, London Property Finder, London property market, london property market news, Stamp Duty

Musings of a London Property Search Agent

The news that HSBC is to make available £1 billion pounds to help first-time buyers onto the property ladder was initially welcomed with derision by some of the more cynical members of our team.  At a time when tracker and standard variable rate mortgagors are paying 2% or less, the new HSBC loans will incur interest rates of 4.99% for those prepared to stump up a hefty £1,499 admin fee and 5.49%  for those who prefer a smaller fee.

However, given the amount of lending proposed and that the bank is prepared to lend up to 90% of the value of a property this should be helpful to first time buyers hungry for a property bargain this year.  It will also help first-time buyers vye with investors to prop up the bottom of the market.

As property search agents, most of our work is at the other end of the property ladder, however we occasionally help first-time buyers find their dream home and purchase astutely.  Our Clients have not had trouble finding a mortgage, but all have had size-able deposits.  They have also tried to borrow the maximum they could, assuming this years bonus or next years pay rise would pay for any increase in mortgage payments.  and frankly, I can understand that feeling.  i mean it’s just too tempting isn’t it, when an extra £20K can buy you an extra bedroom, a better street or maybe just an extra few square feet.  It’s worth it isn’t it?  After all, how many people do you know with £20,000  on their credit cards.  Lets face it – it’s not unknown.

So maybe these rates are actually a blessing in disguise for first time-buyers.  Many financial wizards are predicting a return to double digit interest rates next year and all of them are predicting significant rises, if not 10%+.  In this economic climate, although harsh, maybe these high interest rates for first-time buyers are a good thing – preparing them for what’s to come.  The good news is that where HSBC leads, others will surely follow if they haven’t already.  Perhaps the best advice would be for us all to fix now while we can, in preparation for the rocky road ahead.  But note that we are London Property Search Agents – not mortgage advisers!

Technorati Tags: first time buyer mortgages, First time buyers, Interest Rates, London Property Search Agent

Tags: first time buyer mortgages, First time buyers, Interest Rates, London Property Search Agent

Musings of a London Property Finder

Boris Johnson’s list of measures announced today to prop up the bottom of the housing market and the construction sector bode well for the latter but surely he is missing the point.  First-time buyers need to accept that if they don’t have the funds to buy in the area they’ve always lived in, they need to buy a home in need of work in an area they can afford, which is likely to improve or hold it’s value.  If they buy at a price which will give them a big enough margin to make a little bit of money they will be able to move onwards and upwards in the future. 

Of course everyone wants to live in the best areas, but buying a new build, even with a discount, isn’t going to help them make money and move on.  A one bedroom flat in a new block with a shiny new kitchen, wood flooring throughout and big shower will be of no help if their situation changes.  What happens if you have children or need to start working from home?  With stamp duty at 3% for properties over £250,000, owners on low to average incomes need to save up to pay the stamp duty if they ever want to move and with little or no increase in the value of their home, they may be homeowners, but they will be well and truly stuck. 

Boris and co should be lobbying to increase the stamp duty thresholds and trying to instill a work ethic and sense of entrepreneurship about property into the young so that when the market starts to recover, said first time buyers will be able to enjoy the fruits of their DIY and embark on the next step up the property ladder.  Television programs showing amateurs paying over the odds for sub-standard property and then wondering why they make a loss have a lot to answer for.  But those heady days for vendors have gone and canny first time buyers should be entering the market now and going head to head with investors to pick up a bargain property in need of TLC. 

Those who follow Boris’ lead and buy new now, and need to sell in 5 years time, will sell for the price they paid if they are lucky, with only a few thousand paid off the mortgage.  Still, for security and boosting savings, it beats renting I suppose.  For further help in finding the right property for you call this London Property Finder

Technorati Tags: First time buyers, London Property Finder, Time To Buy New Build

Tags: First time buyers, London Property Finder, Time To Buy New Build