WHAT DOES THE BUDGET REALLY MEAN TO MOST TO OF OUR SELLERS AND BUYERS

A Selling a property

A private seller, selling their primary home has nothing to worry about immediately. 

The future though looks like there will be a return to the old stamp duty threshold from £250,000 to £125,000.  This is not significant as in real terms it will add £2,500 to a purchasers Stamp Duty Land Tax costs from 1^st April 2025.

Capital Gains Tax, despite a lot of fear inducing headlines in the press, will not be increasing, so again there is no change to the status quo.

We do need to keep an eye on interest rates, as these are now most likely not going to see a decrease as had been heavily forecast in the media over the past month or so.

The true cost of living continues to bite and despite an increase in the lowest paid workers income whilst appearing to penalise smaller, local businesses, this will not impact the average house seller locally, affordability is still the biggest single factor preventing real interest and house sales in the local area.

A recent study we carried out, showed that in the main areas in which we work, along with 58 other agents who have offered properties in the area, over a 6-week period since September, 248 properties came to the market or were reduced in price.  Of that number, only 12% changed status to SOLD STC without a price reduction, 8% changed status to SOLD STC after at least 1 and in most cases, 2 price reductions.

This cold hard fact means that 80% of properties are not gaining interest even after a price reduction and almost 90% of all properties coming to the market are in the wrong price category right from the start for buyers to consider visiting or making an offer.

Buying a Property

As above, it is expected the stamp duty threshold will have an impact on any transactions concluding after 1^st April 2025 so best time to find a home, get moved and save a few thousand pounds is now.  Bear in mind that locally, the average sales transaction is taking 6 months due to delays in conveyancing, so it’s more important than ever to choose a conveyancer who is available and able to do the job, remember, they get paid even if do the job badly so ask your agent who is active today, not your friends or family who sold a property 2 or 3 years ago.

We have in place recommended law firms, and we also have in place ways to overcome many of the initial delays in conveyancing, often we can reduce the conveyancing period by 2 months, so as a buyer, give us a call if you need advice or assistance.

Stamp Duty

The current rate at which stamp duty begins is currently £250,000, this is forecast to drop back to the normal level of £125,000 or £2,500 for the average buyer from 1^st April 2025.

For first time buyers, the current relief is up to £450,000 where they do not have to pay any SDLT, this is expected to reduce back down to £300,000.  For most of us mere mortals in this area, this will have no impact as the average first time buyer in South Somerset will not be spending £300,000 on their first home.

Stamp Duty Plus + 2^nd home buyers

This is where the budget is having an immediate negative impact.  Anyone buying a second home, either as an investment or to bridge their purchase by securing an onward purchase and then sell later, will now pay an additional 5% on the agreed price.  This means that for every £100,000 purchase price, you must add another £5,000, so on a house sale agreed at £500,000, that is a whopping £25,000 you need to fork out at the start and then claim back later once you complete the sale of your current home.