Gearing Up After Easter
After a disappointing start to the year, the property market in Dartmouth is beginning to awaken. It is amazing what a couple of days of sunshine can do but, after the dreadful winter weather, it has made all the difference. At the time of writing this article we are looking forward to the Easter break, traditionally the start of our selling season. We also have one eye on the weather forecast which seems to be mixed at the moment. After a period where there has been a shortage of properties coming to the market, the onset of spring has welcomed a number of good and new instructions. This along with generally good news from the country’s property market should provide us with a busy period. Of course we must be cautious as much of this good news is London-orientated but the feel good factor is bound to make a difference.
March’s Budget has generally had the support of the property sector albeit disappointing some especially in relation to the missed opportunity to change the Stamp Duty Land Tax. Stamp Duty requires people to part with thousands of pounds upfront and its current slab structure distorts the UK housing market, acts as a barrier to first time buyers and therefore restricts the demand to build new homes. We had hoped to hear more from the Chancellor on this issue.
Reform of the Stamp Duty system is long overdue, in particular the removal of the cliff edges at the various thresholds which cause significant market distortions. The threshold for the 3% and 4% rates have been unchanged since Stamp Duty on housing transactions was introduced in 2003. This means that the average UK house price has moved from the 1% band to the 3% band, while more and more transactions have been dragged into the higher bands.
Even if the Chancellor shuns wider reform, there is a strong argument for introducing indexation of the thresholds. Had the 3% threshold of £250,000 been indexed by CPI inflation, it would now be at £325,000, whilst had it been indexed by the house price inflation, it would be £390,000. Surely it is time for a long overdue review.
Richard Blake 01803 832288 www.richard-blake.co.uk
First published By The Dart May 2014
