It’s not quite what William Shakespeare asked his audience in Hamlet, but it is a matter of great importance to many thousands of home buyers in the wake of the recent non-budget announced by the new chancellor, Kwesi Kwarteng.
The dust has now settled a little and the international money markets have made their predictions on the future of the UK economy. Hundreds of mortgage products have been withdrawn from the market by lenders, leaving borrowers in a state of confusion and uncertainty. Ordinary people looking to buy a property, as well as existing home owners affected by the drastic increases in mortgage rates, must now try to make sense of the disruption to the housing market and decide what is best for them.
Sadly the information from the many experts and commentators discussing the new measures is at best confusing, and often contradictory. Take the changes to stamp duty for example, with the 2% tax rate abolished on property worth between £125,001 and £250,000, and the threshold for first time buyers raised to £425,000 before stamp duty is due. Many estate agents claim that the stamp duty cuts will benefit first time buyers as well as existing home owners in more expensive parts of the country. And in his announcement Kwesi Kwarteng said: ”Cuts to stamp duty will get the housing market moving and support first-time buyers to put down roots.” The Treasury estimates that the changes will create 29,000 new home buyers each year and spare 200,000 property buyers from paying any stamp duty at all.
However, some professionals are of a different view, suggesting that vendors may look to raise the price of their property in the knowledge that supply is scarce, as well as hoping that buyers will use the savings in stamp duty to help fund their purchase. Others contradict this, suggesting sellers may be forced to adopt the opposite approach and reduce their asking price to avoid buyers pulling out. Tom Bill, of Knight Frank estate agents commented: “Many buyers will find the impact of rising mortgage rates soon eclipses the benefit of a stamp duty cut.” He also expects house prices to fall by 10% over the next two years, as high inflation, rapidly increasing energy costs, and higher interest rates all take effect.
One thing is certain, the housing market will remain in a state of instability for some time to come. There is still a shortage of available homes, with estate agents reporting that this year half of all properties for sale had an offer made on the first day of coming onto the market. One in eight vendors received a bid even before viewings began. Individual circumstances vary enormously and so there can be no single way to approach the new market. The best advice is to do your homework thoroughly and if possible have funds available in advance. Taking professional advice in such confusing times can take away a lot of uncertainty, as well as pointing purchasers towards the best deals.
Bretherton Law have been serving the people of Hertfordshire for over 50 years. Our team of experienced Property lawyers will ensure that whether you are buying or selling, the conveyancing process will run smoothly and professionally. We offer a same day response promise as well as fixed fee quotes. Bretherton Law are accredited under the Lexcel legal practice and the Law Society’s Conveyancing Quality Schemes. Contact us on 01727 869293 or use the contact form on this page.
