propertyrescueservices.co.uk Blog

From 1st August 2007 it became a legal requirement when marketing a property, unless exempt, for sale in England and Wales for the seller to provide a Home Information Pack (HIP), containing a collection of relevant legal and informative documents that relate to the property.

There was a phased introduction of HIPs starting with:

Phase 1 - 4+ bedroom properties (1st August 2007)

Phase 2 - 3 bedroom properties (10th September 2007)

Phase 3 - all other properties (14th December 2007)

Keep up to date with the latest news.

The Government has introduced Home Information Packs to:

- Reduce the stress of buying and selling a property by providing buyers with essential information as early as possible, reducing the chance of delays and added costs.

- Raise awareness of energy efficiency within the home helping the environment and the cost of your fuel bills.

The stamp duty paid on a home in the UK has reached an average of £4,950 this tax year, according to the latest research by
propertyrescueservices.co.uk, based on predictions using HMRC data.

This is up from £3,828 last year and just £709 ten years ago (a ten year increase of nearly 600%). During the tax year 2007/2008, the HMRC will have collected a total of £6,863m from home buyers.

But the amount collected from region to region varies enormously. The average stamp duty paid on a London property is now £12,409, more than 7x the average £1,730 levy in the North East.

Experts commented: “Stamp duty has become a major earner for the Treasury. But its burden is far from evenly spread. Three London boroughs alone paid more stamp last year than Scotland, Wales and Northern Ireland combined! We can expect the same pattern this tax year.”

London buyers massively underestimate how much they must fork out in stamp duty. On average, Londoners expect to have to pay £5,479 in stamp duty – the real figure is £12,409. Buyers in the south west, south east and east anglia also underestimate their liability. The midlands are almost spot on with their estimates of the stamp they must pay, whilst Wales, Yorkshire and the north think they are paying more stamp tax than they actually are.

However, almost every region in the country overestimates how much stamp duty they paid ten years ago.

Experts continued: “People have become so accustomed to being taxed heavily on their home – they can’t remember that this hasn’t always been the case. Taxes on our property assets - in particular through stamp tax - have rocketed over the last ten years. The average person will buy a home around four times in their lifetime – this means today’s first time buyers will pay £20.000 to the Treasury, just through stamp duty by the time they retire. Those towards the south of the country will pay many times this amount.”

Not only do people not remember the lower levels of tax they paid ten years ago, but they think that stamp duty has increased at a slower rate than council tax. Even though 50 percent of people think that council taxes have risen the fastest, in fact on average it has less than doubled when stamp duty has increased by a factor of seven.

“This year, revenues are higher and there are certainly more homes than ever dragged into the tax net by house price inflation. The best reforms would be to raise the lower threshold to a sensible level to help first time buyers on to the ladder, and to introduce marginal bands for everyone. These are the changes we’d like to see made in the budget. But it is such an easy tax to collect and with the government finances looking precarious, the chances of change look remote to say the least.”

Most agents set a guide price slightly above of the figure that they expect to achieve for a property, but the precise level which a vendor will accept depends on a number of matters, the most important of which will be the number of competing bidders and the overall market conditions.

The more secure you appear to be as a buyer, then the stronger your negotiating position will be i.e. if you are a cash buyer and not subject to the sale of your own house or a mortgage, then the better the position you are in to offer a lower price. In a declining market there are better deals to be done than in a rising market. Then it is up to your judgment as to who else is bidding!

From 1st August 2007 it became a legal requirement when marketing a property, unless exempt, for sale in England and Wales for the seller to provide a Home Information Pack (HIP), containing a collection of relevant legal and informative documents that relate to the property.

There was a phased introduction of HIPs starting with:

Phase 1 - 4+ bedroom properties (1st August 2007)

Phase 2 - 3 bedroom properties (10th September 2007)

Phase 3 - all other properties (14th December 2007)

Keep up to date with the latest news.

The Government has introduced Home Information Packs to:

- Reduce the stress of buying and selling a property by providing buyers with essential information as early as possible, reducing the chance of delays and added costs.

- Raise awareness of energy efficiency within the home helping the environment and the cost of your fuel bills.

Deciding on what and how to bid for a property is one of the most challenging parts of the house buying process. There is no set formula and this is a straightforward commercial negotiation, made all the more difficult because the individuals involved may have widely differing standards and business experience.

Property expert’s advice..

Vendor Research

Before even thinking of submitting and offer you need to do as much research as possible into the background of why the property is on the market and how long has it been for sale.
A vendor with a deadline is more likely to negotiate than one who does not have to move. Similarly a property which has been on the market for some months may sell well below its guide price.
Remember also that the vendor is human… he or she will probably be more prepared to negotiate if you take the trouble to be courteous and show them respect. Discuss why they want to move, what their ideal timescales are and how you can help them in the process. This can be particularly important if they are elderly.
Competition

You also need to find out what the competition is. Ask the agent if it is worth viewing the property if you only have budget of £x (set discretely below the guide price): if he says no then you know that they feel in a strong position, if yes then it may indicate that there will be room for negotiation.
When looking around the house ask how many other viewers there have been and how long it has been on the market for.
Hidden Costs

With this information to hand you must also work out what you are able to bid for a property and what it is worth to you.
There are many hidden costs that you will have to pay, not the least of which is stamp duty which, at its highest and most penal rate, is charged at 4% of the value of the property. Add to that legal fees, the cost of improvements and moving, then the net funds available to bid with are soon reduced
Final Offers

How you submit your offer will depend on how the sale is being conducted. “Best & final” offers are submitted in writing and have to be with the agent before the relevant deadline.
Otherwise a verbal offer by telephone will usually suffice…but make sure that you keep a record of the agent’s name and time of your call. It is also often worth putting a deadline of, say, 48 hours for your offer to be accepted otherwise it is withdrawn: this makes it more difficult for the agent to use this to get other prospective buyers to submit a competing bid.
Unless submitting a best and final offer (which needs to be exactly that) you should pitch your opening offer at slightly below the price that you would be happy paying.
It is quite normal for an agent to ask for a better bid and, that you have offered below what the vendor is expecting, may well help to readjust their sights accordingly. Offering the guide price first time is not normally a good tactic!
Room for Negotiation?

The agent has a legal responsibility to report your offer in writing to their client. Beyond that the vendor decides on what course of action should be taken, often as advised by their agent. Particularly in the current market you need to be clear as to whether you already have a mortgage agreed in principle and whether your offer is subject to survey or any other conditions.
The cleaner your offer, then the stronger your negotiating position is and the more likely that an offer below the guide price will be accepted.

If all this fills you with horror, then you can always ask a buying agent to represent you in the process, but otherwise the best advice is do not set your heart on a house until the vendor’s signature is on the contract….only then do you have certainty!

More people are hoping for house prices to fall than to rise, according to the results of a new poll.

The BBC-commissioned survey found that 28% of respondents wanted a drop in property prices, compared with 22% who hoped for an increase.

And in an indication that crash fears may be misplaced, almost two-thirds said a fall of more than 10% would not negatively impact on their household spending.

The research comes on the back of a series of gloomy data from the mortgage industry.

In April average house prices fell by 1.3%, according to the UK’s largest lender, Halifax. It contributed to the first year-on-year drop since February 1996.

The BBC’s poll suggests that for some people this negative trend may be welcomed. In addition, nearly half of those asked said they wanted house prices to stay the same.

A stagnation or fall in prices could help hard-pushed first-time buyers who have struggled in recent years in the face of high price hikes. It could also encourage those hoping to trade up to a larger house in the near future.

And with the underlying UK economy far stronger than it was during the property bust of the early 1990s, fears of the impact of a sizeable fall in house prices appear to be less pronounced.

More than 60% said a drop of more than a 10th would make no difference to their spending plans or make them likely to spend more. That compared with 38% who said it would make them more likely to cut back.

    
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