House prices in Plymouth are on the rise again: Jack Merriott, Director, Cross Keys Estate Agents
Yet again we find ourselves in the situation that everyone who is in the know says that we are hitting hard times with the property market as a result of Brexit, well, Brexit is still not here and nor is the crash that the “experts” were predicting. Things went right to the wire for the March deadline but the market here did not react, if anything, here at Cross Keys Estates, we witness a substantial rise in the number of sales that we have agreed over the last few weeks.
According to the BBC news wesbite, Royal Institution of Chartered Surveyors (RICS), uncertainty over Brexit is likely to have an impact on the UK housing market. RICS believe, and have come up with a report, that the number of properties being sold and the prices that they will achieve will fall next year, they say that fewer people are interested in moving, and fewer want to sell if they cannot reach the price they want for selling their property.
House prices are predicted to increase this year but www.homesandproperty.co.uk suggests only by 1.5%, this is well below the rate of inflation. In essence, this equates to a price decrease.
Having multiple offices in Plymouth means that Cross Keys were able to look at all types of properties across the price spectrum and in all cases we witnessed levels of interest that were quite surprising. Our Stoke branch had no less than 12 sales in just four days last week, this certainly goes against the RICS theory of property sales and property prices going down!
The most interest and sales came yet again from the family homes sector at prices ranging from £150,000 to £300,000, but the biggest increase in buying was in properties that ranged between £300,000 and £500,000. This leads be to believe that no matter what is on the horizon for our country and whether we stay in the EU or whether we leave, family life still moves on and so does the need for quality houses.
Upsizing seems to be the way ahead for the majority of our buyers, previous first time buyers are realizing quickly that with mortgages being as affordable as ever, it is quite an easy transition to move up that housing ladder sooner rather than later. We have had some fabulous sized period properties lately that have been on the market for as little as one week before being snapped up by discerning buyers looking for that perfect lifestyle change as larger properties are able to offer a more sociable lifestyle that is very much en vogue at this moment in time.
Stamp duty rates are affecting the lower end of the market with land lords still reluctant put their hands in their pockets for the 3%, 5% or 8% rate that any buyers have to pay for any second or more properties, for instance, If they buy a flat or an apartment at £145,000 then they are looking to pay £3,750 on the first £125,000 which is at 3% then £1,000 on the remaining £20,000 (£125,000 to £145,000) which is at the rate of 5% meaning a total of £4,750 in total. This amount of money normally equate to the first 2 years profits from any rent that they may earn, so it makes the Buy-to-let market a very disappointing place to be at this moment in time.
As for houses (main residences), the stamp duty rate are as follows:
Purchase price of property Rate of Stamp Duty
£125,001 – £250,000 2%
£250,001 – £925,000 5%
£925,001 – £1,500,000 8%
Over £1.5 million 12%
This is how to calculate the new Stamp Duty Rate. If you bought a property for £850,000 you would you pay no stamp duty on the first £125,000, then 2% on £125,000 to £250,000 = £2,500 then 5% on the remainder above £250,000. (eg: £850,000 – £250,000 = £600,000 = £30,000. Totalling £30,000 + £2,500 = £32,500.
All of these figures may seem daunting to you, but at the current rate of property price increases, these figures are being made back in the price rises in under a 12 month period.
As for our silver seniors, there is a little change in their circumstances. State pensions are due to rise by around £4.25 a week or £220 a year from April 2019 according to moneywise.co.uk. This means that it will rise above the rate of inflation, thus giving pensioners a welcome boost to their earnings and help with living costs.