All this talk about the credit crunch is a red herring. The problem is not falling house prices but falling transaction levels, down by 26 per cent nationally. If supermarkets suddenly sold 26 per cent less groceries what would that say about our economy?
To give you an example: my first flat had a £72,000 purchase price - with £720 Stamp Duty. At today's prices, that flat would be worth £325,000, so the Stamp Duty should be £3,250. But instead it is £9,750! This sum represents nearly a third of the minimum 10 per cent deposit insisted on by banks at the moment.
Credit: Andrew Holt
The market simply cannot continue to be used as a bottomless pit of money by the government, it is being milked dry and the resulting stagnation is bad for everyone. No one can afford to move house anymore, this is not just about first time buyers it's about everyone. The cost of moving from Edinburgh to Manchester if your home was worth £300,000 would be £20,000 and over half of that money is tax, Stamp Duty and VAT on fees. If we reduce Stamp Duty, transaction levels will rise, prices will stabilise and the revenue due to the government could actually go up!
So, what's my advice at the moment? Don't sell if you don't have to. Your house isn't worth less than it was, but people aren't buying. There's a difference between needing to and wanting to move. If you don't need to, don't. People aren't buying unless they need to buy - all because people have lost their confidence. It takes a certain amount of confidence to sit it out.
And if you do decide to buy a house, bargain hard and aggressively - it's a fantastic time to try to be cheeky.
The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.
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