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Avoiding ‘Backlog Britain’

The national lockdown and subsequent localised ones are causing delays in the home moving process. So if you are thinking of moving and making the most of the Stamp Duty holiday which could see you save up to £15,000, you’ll need to get going soon, very soon…like right now!

The Sunday Times recently published an article that said October 12th was the deadline for people to put their homes up for sale if they wanted to complete the transaction before the tax holiday ends on March 31st.

It also reported that there were longer than usual delays when getting mortgage valuations, property surveys, local authority searches and having conveyancing work carried out. And this is very much what we’re seeing in mid Devon.

The property law website – Today’s Conveyancer – says: “Pre-Covid-19 the time it took (from the marketing of the property) to find a buyer was, on average, 79 days, and the total time from listing to moving into a property was 187. If that average holds, then by consulting your calendars you’ll know that September 25th is 187 days before March 31 next year when the property purchasing tax holiday is due to end.”

Either way, if it is October 12 or September 25, the key thing to do is to act now if you want to beat the backlog and move while the financial incentives are in place.

If you are thinking of selling or buying a new home here are our tips to help you speed up the process:

  • Sellers should instruct their solicitor/conveyancer on listing the property for sale to prepare a draft contract
  • Sellers should ask their solicitor/conveyancer to review the property information forms and title and to identify any issues which might impact a sale.
  • Buyers should obtain a mortgage decision in principle ahead of putting an offer forward.
  • Buyers should instruct a solicitor/conveyancer prior to making an offer.

So, it’s crystal clear, if you want to move before the March 31 deadline you need to act right now to give yourself the best chance.

We’d love to be able to help you achieve this and make the most of the busy market we’re experiencing in mid Devon – it all starts with a conversation so give us a buzz on 01363 777999.

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The Crediton and Mid Devon Property Market Post Lockdown – The First 100 Days

So, wind the clock back to 2008 we had the once in a lifetime event of the credit crunch, we then had another once in a lifetime event with the Brexit vote in 2016 and now the mother of all ‘once in a lifetime’ events, Coronavirus in 2020 – three once in a lifetime events in the space of 3 Olympic Games!

The doom-mongers forecast that the British property market would drop like a lead balloon  on the scale of the 1989 housing crash (where property values dropped by 30.87% in a couple of years) but would be nothing compared to the tsunami that was Covid. Yet in the first 100 days of the property market coming out of lockdown, behavioural and economic changes mean that many Crediton homebuyers are now even more dedicated to moving home and the Crediton property market is doing quite well.

Going into lockdown, the effect on activity in the Crediton property market during those two months was expectable and predictable as it was placed in suspended animation during April and May. When the Crediton property market re-opened in mid-May, nobody predicted what happened next. Of course, many of us in the property industry estimated some release of pent-up demand from the Boris Bounce, yet nobody anticipated such a ricochet in activity.

This is particularly interesting when one considers GDP dropped by 20.4% in Q2 2020 (fascinating when compared to notable historic times when it dropped by 13.8% in WW2 and 16.7% in WW1), yet amidst the largest contraction in the UK economy ever in a single quarter, what wasn’t expected was an increase of potential property buyers and sellers wanting to move post-lockdown.

Some have cited this boost to the property market on a number of factors. Firstly, we have had the Stamp Duty Holiday, others have pointed at the never seen before 0.1% Bank of England base rates making mortgages cheap, then we had the furlough scheme which protected so many jobs and finally, the pent-up demand from the Boris Bounce.

Yet, when one actually talks with buyers and sellers, whilst all of them cite one or two of the above reasons, all of them mention and talk about how the lockdown has made them re-evaluate and reconsider how they want to live, their work-life balance and where they want to live. This is also reflected with tenants changing their requirements when looking for a property to rent (so Crediton landlords – be aware of this).

Demand for apartments in the centre of Crediton has eased off, whilst demand for property with a good-sized garden or other outside space has increased. One question we get asked all the time is also the broadband speeds, although they are quite decent in Crediton (the average broadband in our local Council area being 21.0 Mbps download and 5.2 Mbps upload).

So, with record numbers of Crediton properties coming on to the market – is it boom time for Crediton homeowners?

Yes, the Crediton property market is good, yet the number of people who have placed their property on the market has also gone up. Us estate agents have never been so busy putting property on the market and I feel sorry for Ken who puts up our for-sale boards – his poor wife hasn’t seen him in daylight for weeks!

But that does mean you are in competition with so many other properties on the market (the number of properties coming on to the market typically at this time of the year is about a third to half less). The Stamp Duty boost ends in March 2021, so that means you need to have found a buyer by November at the very latest. By overegging your asking price, to test the market, might mean you will lose out on this hiatus and could end up missing the boat!

The prices being achieved for the Crediton properties that have been selling have been fair and realistic and have stood up much better than many were originally predicting.

Yet as the country looks forward, given the ambiguous nature of the outlook for the British economy and the possibility that Covid-19 may be with us for a little while yet, I must implore Crediton property sellers to be realistic with their asking price so a greater number of you who want to make the move, are able to do so.

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Crediton Millennials Moving Back in with Mum & Dad?

Roll the clock back 20 years and any self-respecting late 20/early 30 something would never say on their first date that they lived with their mum and dad. It was seen as a sign of immaturity being tied to your mother’s apron strings with as a failure to leave the family home. Yet over these last two decades, the age of leaving home has been increasing steadily from 20 years and 11 months in the late 1990’s to 22 years and 7 months today.

However, as with all the stats, the devil is in the detail. Although the age of leaving home has only risen by 8% between 1997 and today, those that didn’t leave home in their early 20’s tended to stay much, much longer.

In 1997, 11.26% of 25yo to 34yo still lived at home with their parents,yet last year that had risen to 15.74%, an increase of 391,000  ‘stay at home’ Millennials

However, before we deride these Millennials for still being tied to their mother’s apron strings, I would say those very same Millennials (the mid 20’s to 30-year olds) have been pragmatic, being attracted to sacrificing independence in order to achieve their long-term life goals as they have seen rents rise and an inability to save for the mortgage deposit. All of this has seen the first-time buyer levels in this millennial age range rise for the last three years … so good news for everyone!

However, is all that about to change?

Just as mum and dads in Crediton had thought their late 20 something/early 30 something offspring had flown the nest, Covid-19 has blown some Crediton ‘chickadees’ back into the nest. Back in March, the lockdown saw many Millennials flee the big UK cities, with their constrained and poky shared HMO’s and flat shares, swapping their city centre private rented home for their parents’ Crediton home.

Yet with lockdown lessening, it isn’t just remote workers who are unenthusiastic and disinclined to return to the big cities (fearful of a second lockdown) – many of these Coronavirus blow-ins are deciding to stay put too! A recent YouGov poll asked Millennials of private rented homes what their plans were and 1 in 6 tenants planned to hand their notice in on their rented home and fly back to the nest of mum and dad. The advantages are quite plain, especially as it could enable them to save for a deposit to buy their future home.

There are 3,489 households in Crediton, made up of 1,157 single person households and 2,170 family households (the remainder being made up of shared houses etc.)

Yet how many of those Crediton family households had non-dependent children before Covid-19?

296 Crediton households have children that haven’t flown the nest

That’s 13.6% of Crediton families whose kids are still to leave home … and it’s only going to get worse!

So, what does this mean for Crediton homeowners and Crediton landlords?

It will mean that Crediton parents and their children will get to know each other better, build stronger relationships and it will enable their children, if they are wise, to save for their deposit for their first home purchase – who knows maybe in Crediton, as working from home could become the norm.

Also, with remote working, many tenants are looking for properties with bigger gardens which could translate into greater demand for property with bigger gardens? It will also change the property needs of those Crediton parents and potentially could mean instead of those parents moving down market, they could end up staying longer or moving up market?

Now of course these polls could be a load of hot air. What I do know is that this thing has not played out yet and only time will tell if this will make a concrete change to the way people live, rent and buy property.

These are interesting times and thank you for reading this. Do let me know your thoughts on this matter!

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How not to lose £20,000 of the value of your home

On the 8th of July 2020, the Chancellor announced the first £500,000 of any property bought was exempt from Stamp Duty until 31st March 2021. This also included buy to let landlords (although they would still need to pay the additional 3% stamp duty level for second properties). Talking to many of you Crediton homeowners, I know lots of you are bringing forward your home moving plans to take advantage of this tax cut. Also, many Crediton portfolio landlords are looking to save paying the tax by bringing their portfolio purchases forward.  Yet how do you ensure you sell and buy your Crediton property whilst the tax cut applies (a saving of up to £15,000 of stamp duty on your next Crediton home?).

The biggest issue whenever you are selling your Crediton property is the properties that you are in competition with. Plenty of Crediton homeowners have jumped onto the stamp duty holiday bandwagon since the announcement and there are 93% more properties for sale in Crediton than there were during lockdown. The number of properties for sale in Crediton can split down into type…

  • Detached Crediton homes up 67%
  • Semi-detached Crediton homes up 180%
  • Terraced / Town houses Crediton homes up 114%
  • Apartments in Crediton up 50%

So, now you know what you are up against, what do you need to know?

The most important factor is the time issue. It currently takes on average 17 to 19 weeks between a sale price being agreed and the keys being handed over, meaning you need to have found a buyer before the end of November or early December to enable you to complete the sale by the 31st March 2021. That means you really need to have placed your property on the market by the end of September and early/mid-October at the very latest to take advantage of the stamp duty holiday. Don’t get me wrong though, you could put your Crediton property on the market after that date, yet the price you will be able to achieve for your property could be affected.

There are 157 properties on the market in Crediton, of which 81 have sales agreed on them

Talking of price, or more specifically the asking price. There is a window of opportunity for Crediton homeowners to take advantage of this stamp duty tax cut, yet don’t let local estate agents curry favour with you by tempting you with a high initial asking price to win the right to put their for sale board outside your Crediton home.

A Which report stated in 2017 that many estate agents routinely over inflated the asking prices of the properties they brought to market. One might ask why this is an issue for Crediton property sellers, as surely, they can just reduce their asking price at a later date? The excellent report proved that those estate agents who on the face of it appear to be doing you some kindness by endeavouring to get more for your home with a suggested higher asking price, the property often ended up selling for much less than similar properties that were realistically priced properties from day one and also, they ultimately took longer to sell!

This Which report compared the original asking price with final selling prices for 370,000 properties to ascertain how many estate agents had reduced the initial asking price of properties in order to sell them. Which found that 70,300 (19%) of all 370,000 properties sold had to be reduced by at least 5% in order to get the property sold, whilst the other 81% (299,700) had no or very minimal reductions to get them sold.

Of the 299,700 sold properties that weren’t reduced or reduced by less than 5%, the average initial asking price was £261,000, yet they eventually sold for an average sale price of £260,000. For those 70,300 homes whose asking prices were reduced by over 5%, whilst the average listing price was £266,000, their eventual sale price was only £241,000, a loss of £20,000 each. Even worse, those properties with the heavy price reductions (5% or more) took an average of nine weeks and one day longer to sell (when compared to the other properties with no or minimal reductions).

What that means is by over inflating your initial asking price of your Crediton home, it will cost those Crediton homeowners an extra nine weeks to find a buyer and they will lose out on the final sale price by some considerable margin (meaning you will also probably lose out on the stamp duty holiday).

Assuming your asking is price is realistic, you aren’t out of the woods yet. Other things that will help you get the best price for your Crediton home in the best possible time (and thus save you money with the stamp duty holiday) are…

  • Everyone searches on the portals for their next home. Photos are therefore very important (a picture speaks a thousand words). If the weather isn’t good on the day of the photoshoot, ask the agent to revisit when the sun is out (and even tell them to hold off marketing the property until those pictures are perfect) … as you only get one go at being ‘new to the market’, with all the excitement and interest that causes.
  • Employ the services of a solicitor at the same time as instructing the estate agent. Bringing together the legal paperwork of the property you are selling. By doing so, you will save weeks between the sale agreed and completion. Also, solicitors will be really busy, juggling many property transactions at the same time in the next 200+ days. Anything you can do to get a head start on others can only help your cause.
  • Kerb side appeal. Look at your property from across the road. Does the front door need painting? Could a tonne of gravel spruce up your driveway? Maybe adding some hanging baskets and planted pots will help to make a home stand out for the best reasons?

The final piece of advice I can give you is if you are planning to sell your Crediton home, make sure your Crediton estate agent can show you proof of similar Crediton properties and what they actually sold for to back up their suggested asking price. If the asking price isn’t realistic, the chances are you end up losing many thousands of pounds and wasting everyone’s time.

If you would like to chat about selling your Crediton home, please do not hesitate to pick up the telephone – it all starts with a conversation 🙂

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Why Is the Mid Devon Property Market Red-Hot Right Now?

In this two-minute read, we look at the reasons behind the incredibly high levels of activity in the mid Devon property market.

Earlier this month saw the UK record its highest temperature in 17 years. And it’s not just the weather that’s been red-hot.

The property market in mid Devon is going through a blisteringly busy period, and we’re seeing a surge in the number of buyers seeking property.

Unprecedented was an often-used word to describe the lockdown experience we all went through. And it feels like an appropriate word to use, especially when describing what’s happening in terms of people wanting to move.

So, why is this happening?

Well, we think it’s down to three things. To help people remember them, we’ve called them the 3D effect.

Desire

One of the legacies of lockdown was that many people realised they wanted more from their current home. All that time spent indoors has led to families and individuals rethinking about where, and how, they live. This has accelerated many people’s decision-making processes. Rather than wait a couple of years to move, many feel now is the right time. We’ve heard this from several buyers and sellers who are concluding that life’s too short to delay big decisions.

Demand

When the property market in Crediton went into lockdown it meant all moves were on hold. This caused a ‘blockage’ in the property selling/buying pipe. The relaxation of lockdown and reopening of the property market has seen a surge in demand. And where there is a demand for homes, it creates an increase in their value. So, many homeowners have realised now is a great time to make the most from their biggest tax-free asset. The saying ‘making hay while the sun shines’ springs to mind.

Duty

The Stamp Duty Land Tax holiday for properties under £500,000 means more people now have a larger deposit, making mortgages more available and in many cases increasingly affordable.

On their own, the 3Ds would not have caused such a surge in activity.

But the three have come together in the same period to create the perfect climate for a red-hot property market.

If you are interested in having a chat about what this all means to you, get in touch with us – we’d love to hear from you – it all starts with a conversation!

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How to Find the Right Property Solicitor

When you are selling a home, you have two crucial decisions to make.

Firstly, choosing the right estate agent to sell your home is often the difference between getting a good deal or ending up with no deal.

Secondly, selecting the right conveyancing solicitor will no doubt make your life easier and less stressful. Picking a bad one often leads to headaches, hassle and having to chase them up continually.

We’ve learned a thing or six about what to look out for when it comes to choosing a legal eagle over a tired turkey or a grumpy goose. Conveyancing is legalese for transferring the ownership of property, whether you are buying or selling.

What Is a Conveyancing Solicitor, and What Do They Do?

A conveyancer, or sometimes known more simply as a property solicitor, does the following for you:

  • They will handle the contracts.
  • Be on hand to give legal advice.
  • Carry out local council searches.
  • Deal with the Land Registry.
  • Transfer the funds to pay for your property.

They have a significant and vital part to play when it comes to getting your sale or purchase across the finish line. We realise the importance of their role, and that’s why we’ve come up with the six things to look out for when it comes to choosing a conveyancer or a property solicitor.

Six Top Tips

Recommendations
Ask your family and friends who they have used and would they recommend them.

Communication is key
Some solicitors are notoriously tricky to get hold of and can take days/weeks to respond to your questions. Before instructing any solicitor, it’s worth asking if they have a system in place where you can view/check on the progress of your sale or purchase? And what is the minimum timeframe within which they promise to get back to you?

Do they embrace technology?
This is an excellent question to ask as some solicitors do not hold technology in high esteem, which can cause problems along the line.

Holidays
Don’t get us wrong, everyone needs a holiday, but it’s not unreasonable for you to ask if a solicitor is going on holiday during the period when you are looking to buy or sell. The last thing you want is to be nearing the exchange of contracts to seal the transaction only to find out your solicitor is away and no one else has been left to work on your sale or purchase. If they are going away ensure that someone else is overseeing your file during that period so that matters don’t come to a grinding half for a fortnight.

Do your research
Make sure your chosen property specialist is a member of the Law Society of England and Wales/Law Society of Scotland and a member of the Law Society’s Conveyancing Quality Scheme. Conveyancers must be members of the Council for Licensed Conveyancers.

Ask us
We’ve worked with hundreds of different conveyancing solicitors over the years. And we’ve experienced a real mix of the good, bad and the ugly (not that we are saying they’re unattractive cowboys or girls). Feel free to give us a call, and we’d be happy to provide you with recommendations and more insight into why choosing the right solicitor or conveyancer will make your life easier and raise your chances of property success.

There are plenty of great solicitors and conveyancers out there, you just need to do your homework to find them.

Thanks for reading and get in touch or leave a comment below if you want answers to any of your property-related questions.

And remember we’re here to help!

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What’s Next for the Crediton Property Market?

There is no doubt that Coronavirus will affect the Crediton Property Market, but just how?

The ensuing economic challenges are going to impact the Crediton (and UK) property market, yet no one knows the real answer. The newspapers eulogise different opinions, but that’s all they are – opinions and everybody’s got a different opinion. The truth of the matter is we don’t know and won’t know for another few months at least, if not more?

There have been some outstanding Government supportive measures both for tenants, landlords, home buyers and sellers (including a pause on evictions for tenants, and for landlords and homeowners, mortgage payment deferments and stamp duty reductions to make buying a home cheaper), and whilst these are only temporary, they have done their job, meaning there is an astonishingly good level of activity in the Crediton property market.

A lot of that is pent-up demand from a couple of years of uncertainty because of Brexit. Also, we had the General Election in late 2019, so there have been so many reasons for people to sit on their hands. At beginning of 2020, it was like a water hose ready to burst with the Boris Bounce in January and February. Then, just as things were beginning to get going in the Crediton property market, we had everything freeze up for months during lockdown. Since lockdown has been lifted…

the Crediton property market is open once again for business  and there is unquestionably some impressive activity both in the sales and rental market.

So, back to the original question and where are we going? I think what we will see is a subtle change to where people want to live because of the pandemic. People working from home has shown that the need to be in the big cities has reduced and as employees have realised, they can work very efficiently from home, plus they are happier and have a better work/life balance. Their employers are also happy as they get more work out of their staff and can reduce their costly office footprint in the cities. The same goes for Crediton tenants as they are wanting more from their rental homes. Three trends we have noticed is there is greater demand for properties with gardens, greater demand for Crediton landlords who will accept pets (as they now can have them as they work from home) and finally, tenants willingness to pay top dollar for ‘top of the range’ properties, whilst more basic and uncared for properties without all the ‘bells and whistles’ need to go for a discount. There certainly has been a flight to quality.

Yet, what worries me is the fundamental future uncertainty in 2021 and beyond. What will things look like say in Spring 2021 when the Stamp Duty reductions are phased out? Any property sold needs to have completed by the end of March 2021 to take advantage of the tax holiday, meaning you need to have sold your property by November 2020 at the very latest to ensure your property purchase and sale deal goes through in time (as it is taking on average up to 17 weeks between sale agreed and completion). This is where the difference between a great solicitor, brilliant estate agent and awesome mortgage broker compared to average ones will show. Good ones, when all three are working together for you, can get the sale through in 6 to 8 weeks, not the national average of 17 weeks, meaning if you are cutting it fine, you might not be able to take advantage of the tax savings in the spring. Give me a call if you want to know who the best of the best in Crediton are to ensure you don’t lose out on those tax savings. 

The value of the average Crediton home currently stands at £284,400

So, what is going to happen to the Crediton property market? It really depends on the economy as a whole and of course the property market is a large part of that. I know one thing that buy to let landlords and home buyers don’t like is ambiguity and the British housing market has always lived and breathed on emotion and sentiment. People will only buy and sell property (and borrow the money to make those transactions happen) when they feel good. Are all these things like Stamp Duty holidays just putting off the inevitable? Are we heading for the mother of all property crashes?

Well, let me put sentiment and opinion aside for a second and look at the simple facts.

We have an increasing population, yet we don’t build enough houses

Since 1995, we have built on average 150,200 properties per year. The Barker Report said 2004 the country needed 240,000 per year to satisfy annual demand for new homes and whilst the number of new homes built in the UK last year rose 1% to a 13-year high, only 161,000 homes were built. That means over the last 25 years, with the difference between actual homes built and the targets set out in the Barker Report, we have an inbuilt shortage of 2,245,000 homes, meaning…

Since the Millennium, property values in Crediton have increased by 165.9%

Other factors have contributed to that. The average age of a person leaving their parents’ home in the UK is 24.4 years and that has been dropping for a few years meaning more homes are required. People are also living longer (in 2000 the average person lived until 77.7 years and now it’s 81.1 years – doesn’t sound a lot until one considers for each additional year the average person lives in the UK, we need an additional 356,500 homes). Finally, we have got immigration. In the year ending March 2019, 612,000 people moved to the UK (immigration) and 385,000 people left the UK (emigration) – meaning a net increase of 227,000 people (or a requirement of c.100,000 homes to house them in one year alone). All those factors in themselves mean…

we have more demand for Crediton property than we have supply and that’s not going to change any time soon

Property markets are driven (like all markets) by supply and demand so I believe Crediton property values can only rise in the long term. The question is whether Crediton people will have the sentiment and confidence to borrow money on a mortgage and invest in property, yet at the moment with ultra-low interest rates, borrowing money to buy a home has never been so cheap and if you are in it for the long-term (which you should be with property) then I think it’s good news.

One piece of good news is that mortgage lenders are willing to lend up to 90 per cent loan to value mortgages for first time buyers (and in some rare cases 95 per cent), albeit with a lot of strings attached … yet this is a good sign as the banks and building societies wouldn’t be lending at these levels if they were too scared.

Investing in property, be it for yourself to live in or buy to let is a long-term game. We might see an uplift in prices in the short term because of the demand mentioned above, then again, we might see a dip in 2021 yet again for the reasons mentioned above – until we start to build new homes to the scale of 300,000+ a year (something that has never been achieved since 1969), the long-term picture appears to good. Be you a Crediton landlord, Crediton house seller or Crediton buyer, you do have to be a lot more strategic and thoughtful about what you are going to do. If you would like to pick my brains, drop me a message on social media or pick up the phone.

So those are my thoughts, tell me your thoughts for the future of the Crediton property market?

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The clock is ticking for buyers and sellers in Crediton who want to get moving

In this two-minute read, we look at why the opportunity clocks are ticking for people wanting to make the most of the Stamp Duty holiday.

“Life is a Game” is a quote attributed to Mother Teresa, but it could be easily applied to property. As with all games, there are winners and losers when it comes to selling a home. Timing always plays a part in how successful you are, as does having a talented estate agency working on your behalf to get you a winning result.

The announcement earlier this month that Stamp Duty for properties under £500,000 is eliminated until March 31, 2021, means there’s now plenty of opportunity knocking on the doors of homeowners in Devon.

Buyers can save up to £15,000 during this window.

Opportunity Clocks

Depending on what source you look at, it takes on average (from a cold start) between 176 to 200 days to sell a home. This means the opportunity clock is now ticking before that March 31 2021 deadline.

The Stamp Duty holiday means:

  • Deals that were dead in the water over a difference in the value buyers and sellers were prepared to accept (especially between £15-30,000) are now potentially resurrected.
  • Having more to put down as a deposit is opening more of the mortgage market to buyers.
  • As is the decision by several lenders to reintroduce 90% Loan to Value mortgages.
  • If you’re thinking of selling, you’ll also benefit from the Stamp Duty removal if the place you’re buying is under the £500,000 bracket.

But it’s not enough to put your most valuable tax-free asset up for sale and hope the rising tide of a buoyant market mid Devon helps you achieve the premium price for your property.

You also need to remember the following five things, which we’ve related to classic game shows to help you remember:

Blankety Blank – Watch out for cheap and not so cheerful agents or agencies that promise the earth but can’t back it up with evidence and case studies.

The Price is Right – Overvaluing a property will mean it sticks, no matter what the market is doing or if stamp duty has been put on hold. Pricing it correctly to sell at a premium price is a skill experienced agents like us have.

Through the Keyhole – When you are on the market, your property gets put under the microscope so prepare it thoroughly so that viewers will feel like it’s a place they’d love to call home.

Countdown – Remember that date – March 31, 2021 – The sooner you start marketing your property, the better. The clock is ticking.

Bullseye – When you choose an agent with an excellent track record and fair fees who values your property correctly and can guide you on every aspect of the selling process, you’ve hit the bullseye. And you won’t be left thinking about what you could’ve ‘won.’

At Helmores we see working with a client to sell their home as a team effort. So, if you like the sound of our approach and are interested to know how we’d help you make the most of the Stamp Duty window of opportunity, let’s talk.

Thanks for reading!

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Every Crediton Homeowner & Landlord to Receive up to £5,000 Grant for Roof Insulation & Double Glazing from September

future green energy

The Chancellor announced on Wednesday 8th July in his mini Budget some interesting news for homeowners and landlords across the UK. Rishi Sunak is going to give ‘The Green Homes Grant’ of up to £5,000 to cover two-thirds of the costs of environmentally friendly upgrades to your property, with the homeowner covering the other third. There are also enhanced grants of £10,000 for the poorest households where 100% of the cost will be met by the Government.

This is nothing new mind you. The coalition Government in 2013 announced The Green Deal. That deal was in theory to have been a help for the builders, energy saving and home improvement industry, as the Government hoped many would take up environmentally friendly improvements to save energy (and ultimately greenhouse gases). Yet by the time it was brought to an end two years later only 14,000 households had applied, costing the taxpayer £238m (or £17,000 per household). That doesn’t sound good value to me – yet who am I to comment?!

Anyway, let’s not be negative, as improving our homes makes sense – after all, research shows Brits have the draughtiest homes in Europe. A recent survey suggests UK homes “leak” heat up to three times more quickly than more energy-efficient homes on the continent.

Data from 80,000 smart thermostats across the EU were reviewed to measure how quickly a home at 20°C inside cooled once the heating was turned off (when the outside temperature was 0°C). Within 5 hours, the average British home dropped by 3°C, the French came in second at 2.5°C yet the Germans came in at just 1°C, meaning British homes clearly need more heating (i.e. greenhouse gases) to keep them warmer.

The chancellor has allotted £2bn to the scheme, which pays for two thirds of the cost of the upgrade and stated that more than 650,000 homes would be upgraded. This could save those households a total of £195m a year in heating bills (or the equivalent of £300 a year per household), cutting greenhouse gases and saving jobs in the construction industry. The grant can be applied for from September and is open to Crediton homeowners and private sector Crediton landlords. Applications must be made before March 2021 and the Treasury have stated about half of the fund would go to households with the lowest incomes (how low is still to be announced), with an enhanced grant of up to £10,000, saving them up to £600 per annum each on their heating bills.

The average Crediton home annually produces 5.011 tonnes of CO2, compared to the national average of 4.101 tonnes

Due to the particular individual nature of the properties in Crediton and their construction type, with suitable improvements in insulation, double glazing and draught proofing, Government statistics state that this could be reduced to 2.748 tonnes for Crediton homes if suitable work (as per the Green Homes Grant) was carried out.

Why is this important? Well UK householders spend £34.735bn a year on their electric and gas bills – this is a lot of money. In fact, looking specifically at Crediton properties …

Crediton householders spend £814.40 per year on  heating their homes (compared to the national average of £669.34 per year)

Yet, if Crediton householders carried out the energy improvements that ‘The Green Homes Grant’ suggests their energy bills for heating alone would reduce to £570.26 per year … quite a saving over a decade and beyond (enough to buy a decent holiday – whatever one of those is!).

So, with Crediton homeowners and Crediton landlords being able to spend the grant on loft, floor and wall insulation, low carbon gas boilers, heat pumps, double or even triple-glazed windows, energy-efficient doors and low energy lighting … everyone should win – the environment, the economy and household budgets. More details on the scheme should be released by the Government in August. We’ll keep you posted on any updates!

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Crediton Home Buyers & Landlords Set to Save £580,970 in Stamp Duty Over Next Nine Months

The British are infatuated with owning their own property and politicians know that. Margaret Thatcher used it as a vote winner in 1979 when she allowed council house tenants to buy their own home. Coming to the present day, Boris Johnson’s Conservative government have anxieties that the Brits have not been buying nearly enough homes lately and, as with all countries in the world, the British property market was put ‘on ice’ for several months to help contain the Coronavirus, exacerbating the problem.

The Chancellor, Rishi Sunak, announced on Wednesday plans to boost the property market by momentarily scrapping Stamp Duty Tax (a tax paid by homebuyers) when they buy a property that costs less than £500,000.

Interestingly, Stamp Duty was originally introduced in 1694 as a way to raise funds for The Nine Years’ War (1688–1697) against Louis XIV of France and applied to property and some legal documents.

Why is this important? Well the Government recognise that when the property market is working well, the economy also tends to work well, yet one of the barriers to people moving home is Stamp Duty. Even before Coronavirus, Brits were moving 40.21% less than they were at the start of the millennium, and now with this dreadful situation, the natural reaction is for people to stay put in their own homes, meaning another potential nail in the coffin for the economy.

Stamp Duty has raised not an insignificant £166.53bn since 1998, impressive when you consider the NHS costs £129bn per annum. Looking at more recent figures, the Government currently raise £1.045bn per month from Stamp Duty Tax and this statement will remove a good chunk of that from the Chancellors coffers each month, yet the Government knows a healthy property market will help the wider economy.

As Stamp Duty is a transaction tax, it restricts labour market mobility, making people who are thinking of switching jobs think twice before moving. Stamp Duty also holds back elderly homeowners from downsizing to smaller homes, which is an issue for the UK, as we don’t have enough homes to meet supply and also curtails first time buyers as it forces them to use some of the savings on the tax, as opposed to using for a deposit.

Before the changes, the Stamp Duty thresholds were as follows: 

  • Zero percent up to £125,000
  • Two percent of the next £125,000 (the portion from £125,001 to £250,000)
  • Five percent of the next £675,000 (the portion from £250,001 to £925,000)
  • Ten percent of the next £575,000 (the portion from £925,001 to £1.5 million)
  • 12% of the remaining amount (the portion above £1.5 million)

and between the 8th July 2020 and 31st March 2021 the thresholds are:

  • Zero percent up to £500,000
  • Five percent of the next £425,000 (the portion from £500,001 to £925,000)
  • Ten percent of the next £575,000 (the portion from £925,001 to £1.5 million)
  • 12% of the remaining amount (the portion above £1.5 million)

Landlords and buy to let landlords will also benefit from these reduced rates yet will still have to pay their additional premium for second homes (as they have since April 2016).

To give you an idea how significant this is, if these rules had been in place exactly a year ago for Crediton properties purchased under £500,000 (i.e. between the 8th July 2019 and 31st March 2020).

Stamp Duty would not have been paid on 210 Crediton properties, worth in total £53,620,300

Anyone buying any home in Crediton over £500,000 are also winners in this, as they will save having to pay the first £15,000 in stamp duty (under the old scheme). This is because during these 9 months, stamp duty is only paid on the difference over £500,000 (so if you buy a property for say £620,000 – one only pays the stamp duty on the difference between £620,000 and £500,000 i.e. £120,000).

I’m all for reducing Stamp Duty, which is imposed progressively at higher rates the higher a property costs (as you can see from the tables above). Yet, short-lived changes to property taxation risk warping the property market and generating a ‘property market hangover’ in Spring 2021. I am part of a group of 2,500 estate and letting agents from the UK, and most of us were running at 150% speed before this announcement, coping with the post Coronavirus explosion in demand.

Now it seems that the ‘feast’ will continue until the end of March 2021 as many more people will move to take advantage of the cut in tax. However, some are suggesting this could lead to ‘famine’ down the line as it will stop people moving into the late spring and summer of 2021.

History tells us different stories on the influence on transaction volumes from changing Stamp Duty rates. In 1991 the Tory’s raised the Stamp Duty threshold at which house buyers started paying and Gordon Brown did so in 2008 when we went into the Credit Crunch. More recently, both George Osborne and Philip Hammond fine-tuned Stamp Duty so that landlords had to pay an additional Stamp Duty Premium after March 2016 whilst first-time buyers pay less Stamp Duty and the purchasers of more expensive homes (over £1.5m) pay more.

The Stamp Duty changes for landlords in 2016 affected the property market only for a short while and by the autumn, transactions levels had returned to normal. However, in 1991, John Major’s Stamp Duty change encouraged home buyers to bring forward home purchases but nevertheless the property market ground to a standstill again once the benefit ended (although the steps up the 1990’s Stamp Duty levels were much harsher as the tax applied to the whole purchase price, not the margin steps as it had in the 1990’s).

So how much money will Crediton people save when buying a home under £500k?

The average Stamp Duty paid by those Crediton home buyers in the 9 months between the 8th July 2019 and 31st March 2020 was £2,767.

Being objective, I can see why the Chancellor could see this as a suitable way to motivate spending because when people move home, they are more inclined to spend comprehensively on property renovations and the services of solicitors, home removal people, tradesmen and estate agents. So, drastically reducing Stamp Duty will undoubtedly help the UK economy, or at least contain some of the damage from the Coronavirus.  

Also, the experience of being in lockdown will have confirmed to many Crediton people that they need a bigger home or one with a bigger garden. I also suspect other people may be able to work from home on a more long-lasting basis, meaning there could be a shift from the larger cities to outlying towns and even a move to the countryside.

So, these are my thoughts, what are yours? I’d love you to post them in the comments below! 🙂