At QualitySolicitors Large and Gibson we understand that buying a property or moving home can an exciting time but with the ever-changing market it can often be quite confusing, so is now really the best time to buy?
Richard Wootton, Senior Partner of QualitySolicitors Large and Gibson with over 25 years of conveyancing experience shares his thoughts on where the property market is heading:-
We have seen an increase in the price of properties over the recent months which can be attributed to a number of different aspects.
Stamp Duty is playing a key part in the changes in the property market at the moment. On the 3rd December 2014 Chancellor George Osborne announced that there would be changes in the way stamp duty is calculated which would benefit 98 per cent of homebuyers. These changes were implemented on the 4th December 2014.
Saying that 98 per cent of home buyers will benefit from this change does sound impressive but how has this impacted on the property market?
Stamp Duty was previously calculated on the whole of the price of the property depending on which ‘band’ the purchase price fell into, particularly in the Hampshire area there was a noticeable inclination for sellers to market the property under the £250,000 stamp duty threshold as this would be more appealing to a purchaser who would then have to pay 1 per cent or the purchase price rather than three per cent.
Now that this method of calculation has been disposed of the prices of property have started to increase as sellers are no longer restricted by this stamp duty threshold.
It should also be noted that the demand for properties is currently outweighing the availability. This is particularly noticeable in areas such as Portsmouth where although there are a few developments taking place, there is little room for a new build development project.
FINANCING THE PROPERTY
One of the key tools that is helping both first time buyers and those wishing to move to a bigger home is the government’s Help to Buy Scheme. In the first 21 months (to 31 December 2014) 41,533 properties were bought with the support of the Help to Buy Scheme.
The main benefit of this scheme is that proposed purchasers will only need a five per cent deposit, this is allowing more people on to the property ladder who would previously have been unable to raise the full deposit and purchase a property
An alternative method of financing the deposit for a property which has become quite popular over the last few years is gifted deposits through ‘The Bank of Mum and Dad’. Many first time buyers are now being gifted part or all of their deposit from their parents. 70 per cent of parents say their support for their child is a gift. But whilst gifting your child the cash they need may seem like the right thing to do, it could leave you (and them) unprotected. For example, if your child and their partner separated, you could both lose the money. My advice would be by loaning instead of gifting, your money is protected. And you can always make a gift of that loan later, when you feel more confident about the situation as their relationship matures – whether a gift or a loan, either would of course need to be approved by the Mortgage lender.
Interest rates for property purchases are at historically low levels and are likely to remain so according to comments from the Bank of England for the foreseeable future, perhaps even into 2016!
Some latest Mortgage product rates have shown the interest rate for a two year Tracker with a 60 per cent loan to value is now 41 per cent lower on a year on year comparison – down to 0.99 per cent from 1.69 per cent
WHAT’S AROUND THE CORNER?
Whilst it is difficult to say with any certainty what the future of the property market holds, particularly with the general election just around the corner, it is a safe to assume that property prices will continue to increase and that now really is a very good time to purchase a property.
So whether you’re a first time buyer, looking to move home or choosing to invest in property give one of my friendly team a call on (023) 9229 6296 or visitqualitysolicitors.com/largeandgibson for a free no obligation quotation. We are confident we can give you the help and support you need to make your dream new home.