Thursday, 23 November 2017

"House prices increase by precisely the amount of stamp duty cut"

From The Daily Mash:

Prospective first-time buyers of a £280,000 London flat, set to save £4,000 in stamp duty, will now find that the flat costs £284,000.

Estate agent Carolyn Ryan said: “I’ve just finished changing all the prices in the windows. “It took two hours actually, so unfortunately we will have to pass that on to buyers as an extra £200 admin fee.”

Read article for punchline.


Woodsy42 said...

That shoudn't happen to such an extent because the majority of purchasers are not first time buyers. Upping the price will reduce the interest from all other prospective buyers and movers and make the property slightly less attractive. It will eventually settle at the 'market price' (yes I know it's a rigged market and full of greed).I agree with you that Phil's change is a very imperfect and very minor part solution but it does rebalance things slightly by making cost slightly easier for first time buyers compared to movers, which has to help even if only minimally.

mombers said...

@Woodsy42 every non-FTB purchaser will be competing with potential FTBs armed with more money due to stamp duty cut. So if they don't match the price they won't get the home. They are already at a disadvantage due to being in a chain so will have to stump up even more. When we bought our lower offer was taken over a chain. When I sold my flats in Cape Town I took lower offers from chain free folk. If we ever luck out and are able to afford to move, I'm very tempted to sell, rent, then buy again - able to take advantage of being picky on who I sell to and who I buy from.

Mike W said...

Yes, lovely gag. Youngsters, all trapped into one nasty version of the rentier future: 'sold' to them as market choice. As it happens I read all the linked DM articles. 'Women's Intuition' et al. Everyone of them made me laugh. Reminded me of university and how Viz made you laugh at each story out loud. Us Oldies a, all trapped in a rose tinted past :) It couldn't have been that good?

Mark Wadsworth said...

W42, agreed, it will not be entirely passed on. And the 6% SDLT diff between FTB and BTL buyer must tilt the scales slightly in favour of FTBs.

M, yes, don't buy and sell on same day, it's hell.

MW, as fast as housing is concerned, the old days were much better. Ended about 20 years ago

jack ketch said...

Why do we British seem intent on 'encouraging' first time buyers? Surely we should be cautioning our children against going into debt for half an adult life? I suppose some might claim it is an 'investment' but 'investment' is just another word for 'gamble' and my old Dad gave me some sage advice about gambling when I was a late teen and heavily into 3 card Brag (which is poker but for men): "the only way to win at gambling is to be able to afford to lose your stake and not notice it. You start playing with money you can't afford to lose then you will".

Mark Wadsworth said...

KJ, FTBs are cannon fodder whatever they do.

If they buy, they are in a lifetime of debt and will vote for the Home-Owner-Ist Party to keep the Ponzi scheme going.

If they stay renting, they get poorer every year and the older landowners get richer.