No one can have failed to notice the rise in house prices and the rush to buy property, particularly since the lockdown eased. Reports from the Royal Institution of Chartered Surveyors (RICS) tell us that the number of properties being put up for sale is not keeping up with the increased demand.
According to RICS the predominant requirement from prospective buyers is for property with more internal and external space, an understandable reaction to the lockdowns which have seen urban dwellers, especially, suffering from the effects of being cooped up for long periods of time.
The recognition by most of us of how badly we need to have access to space for our own mental health and that of our families has been brought into focus during this pandemic and, for those of us with the means, looking for alternative accommodation promising a better lifestyle has been a major factor in the surge in demand.
The other main reason has been the suspension of stamp duty land tax (SDLT) on property valued at £500,000 or less, which has proved to be a massive incentive by cutting the costs on a £500,000 property by £15000. In addition, reduced rates of stamp duty also apply for all transactions completed by 30th June. A 5% rate applies on valuations between £500,001 and £925,000 followed by a 10% rate between £925,001 to £1.5 million, and finally 12% for homes over £1.5 million.
On the 1st October, the SDLT rates revert to their original levels.
The demand for properties has also given rise to other issues for estate agents and sellers. While properties are selling almost before the property details are put up on agents’ websites, the numbers of prospective buyers are overwhelming agents’ abilities to cope with organising viewings. It has been reported that some agencies are asking for written proof of a potential buyer’s ability to purchase before they will allow a property to be viewed.
While it is understandable to try and weed out the ‘sightseers’ who only want to look and have no intention of buying, the ways that estate agents can use to do this need to be scrutinised. Unconfirmed reports of one agent charging £5 upfront in cash to view a property looks very suspect. Other accounts of an upfront fee being levied by agents which is non-refundable if the prospective buyer does not show up, illustrate just how overheated the market has become.
We would urge caution if any kind of fee is requested by an agent as a condition of seeing a property. In addition, be extremely careful in providing any personal financial details to agents before seeing a property. Without a clear demonstration of how your data is used and securely held, it might be better to look elsewhere.
© Copyright , Cox & Flight Financial Solutions Ltd. All Rights Reserved.
Cox & Flight is a trading style of Cox & Flight Financial Solutions Ltd and is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Cox & Flight Financial Solutions Ltd registered in England and Wales with company number 13246868. Registered Office: Unit A, Suites 2&3, Briar Rhydding, Baildon, BD17 7JW.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £499. Your home/property may be repossessed if you do not keep up repayments on your mortgage.
The Financial Conduct Authority does not regulate some forms of Buy to Let mortgages.
The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.