Tuesday, June 26, 2012
The National Association of Estate Agents (NAEA) successfully
campaigned for the introduction of the original Stamp Duty Holiday
for properties priced at £250,000 and below. However, the
exemption has since been lifted and the 1 per cent tax reinstated,
as the Government rolls out its NewBuy Guarantee Scheme that it
claims will assist home buyers.
Mark Hayward, President of the NAEA, said: "Since the economic
downturn took hold in 2007, we have consistently called for
increased support for first time buyers to aid the wider recovery
of the housing market.
"Assisting those seeking property at the start of the ladder
could help to generate upward momentum in the market. The Stamp
Duty Holiday provided a degree of breathing space and, without it,
the prospect of homeownership will mean more months of saving for
many people.
"Although the latest figures from the Council of Mortgage
Lenders have shown a 24 per cent rise in gross mortgage lending in
May, this follows a very poor performance in April. Although the
average UK house price has dropped by 3.29 per cent to £226,827
year on year, just 12,600 loans were advanced in April, down 48 per
cent on March data. It is likely we will see lending levels
continue to fluctuate in the coming months until an adequate
mechanism to support the first time buyer market is introduced and
restrictive lending policies are curtailed.
"In this tough market, it is important that those who are still
able to buy think honestly about what they can afford and agree on
a bid ceiling before entering into negotiations with the vendor. It
is easy to get carried away, so house hunters should resist the
temptation to reveal their maximum budget, leaving enough room to
make additional offers if the initial one is rejected. Researching
prices of similar properties in the postcode, and what they were
sold for, can also provide a degree of flexibility when
negotiating.
"If costs are stacking up, joint ownership is an alternative
option. Increasingly, first time buyers are buying in partnership
with friends or family, which means sharing the deposit, bills and
Stamp Duty costs as well as purchase price. This can prove an
innovative way to overcome steep mortgage lending requirements but
ensuring trust and transparency is the key to the success of this
type of purchase. Both parties should sign a joint ownership
agreement, clarifying exit strategies in case the circumstances of
any partner change.
"These kinds of measures can certainly help to minimise costs
and help first time buyers get onto the housing ladder in what is
proving a very difficult market place. But what we need to see is
much more commitment from the Government and the major lenders to
help lift the barrier house hunters trying to buy, currently
face."