Buying Property Phil & Kirstie's Stamp Duty Plans

Date Published:

25/06/2008

Want to know how the latest stamp duty measures will affect you? Click here to find out. For more about Phil and Kirstie's plans, read on...

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In the latest series of Location Location Location, Phil Spencer and Kirstie Allsopp announced that they were going to be lobbying the government to make changes to stamp duty. As Kirstie said, 'I've been advising the Conservatives on some policies but this is bigger than party politics… it's people’s lives.' They're obviously serious, but what are their plans exactly? Here, they tell us...

Our Plan
First time buyers should not have to pay stamp duty land tax (SDLT) when the value of the purchase property is under £250,000.

Stamp duty land tax should be graduated for everyone else so that buyers generally pay one per cent on the first £125,000 to £250,000. Over this threshold, the three per cent would be charged only on the amount over £250,000 (rather than the full amount) and similarly at the four per cent threshold, buyers would be charged four per cent only on the amount over £500,000 (rather than on the full amount).

Latest Economy And Property Market News And Facts

Property Market Transactions Figures
Land Registry Deals, England And Wales*

* The number of properties sold in England and Wales fell by 34 per cent from 86,733 in February 2007 to 57,016 in February 2008.

* In the months November 2007 to February 2008, transaction volumes averaged 72,479 transactions per month. This is a decrease from the same period last year when sales volumes averaged 103,141 (they haven't given us a percentage decrease for this - we have worked it out to about 30 per cent).

*Released 30th May 2008

* Scottish figures aren't directly comparable as they use different months. Scotland's land registry figures say transactions are down 16.1 per cent if you compare January to March 2007 (32,791 transactions) with Janurary to March 2008 (27,051 transactions).

* We are awaiting Ireland figures.

Current Average Property Prices
* The latest average house price in England and Wales for April is £183,626 (Land Registry).

* The latest average house price in Scotland is £150,257 (quarterly figure from January to March 2008) (Scottish Land Registry).

* We don't have Northern Ireland.

* House prices fell 2.5 per cent in May 2008.**

* House prices have fallen 4.4 per cent since last year - the biggest annual fall in house prices since December 1992.**

* House prices are 4.4 per cent lower than last year but remain five per cent higher than two years ago.**

** Released 29th May 2008, according to the Nationwide, for the UK

Mortgages
* Mortgage approvals for house purchases have weakened to historically low levels and look set to soften further in the next few months. Overall, we expect the number of mortgage approvals for house purchases and the number of property sales to be around 35 per cent lower than last year.*

* We now expect house prices to be about seven per cent lower in the fourth quarter of this year compared with the fourth quarter of 2007.*

* Source: Council Of Mortgage Lenders (May 2008)

* According to the Bank of England in April 2008, just 58,000 new mortgages for house purchases were approved, the lowest figure since the bank began reporting the figures in 1993 (We are waiting for confirmation on this).

General Opinion Varies
* However, some more pessimistic experts predict a 25 to 30 per cent fall in house prices if things carry on like this.

* According to Legal and General we could be heading towards a recession - does not cite property market but just general economy.

* James Carrick, Investment Strategist at Legal & General Investment Management flagged the possibility of a UK recession. 'While the Bank of England anticipates below-trend growth in 2008 and a recovery in 2009, our recession predictor is suggesting concern',*

* Released 21st May

Effects On Other Industries
General
There are many headlines of knock-on effects to other linked industries: housebuilders, estate agents, removal men, etc of the property market slowdown.

Estate Agents
* There have been reports of many estate agents going out of business and figures vary. We have spoken to the public relations office for one estate agent Reeds Rains (part of Humberts) who admits 15 out of 147 branch closures - there are reports of many more.

* The figures of 150 per week and thousands of branches closing, which appear everywhere, can't be substantiated from their sources.

New House Builds
* New house builds are down almost a quarter since last year, and the lowest figure since 1996 (fact checked from National House Building Council).

Other Organisations Who Have Spoken Out Or Campaigned Against SDLT
Council of Mortgage Lenders (CML)
Royal Institution of Chartered Surveyors
National Association of Estate Agents
Jon Charcol (brokers have petition on their site)
Halifax
Smartmoves
New Homes Marketing Board

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