dothesums blog

Link: http://www.dothesums.co.uk/blog

The Chancellor this week confirmed that the break from stamp duty, under which anyone buying a house for £175,000 or less, avoids paying the 1% duty, will end on the last day of this year and will revert to £125,000 on the first day of the new year.

Prices are already out of reach for first-time buyers, who are struggling to gain a footing on the housing ladder, thanks to the constraints in the mortgage market.

The overall impact of the move will have a limited effect, but in some regions of the country the impact will be felt harder. In London most houses are too expensive and in some areas of the North a number of homes fall below the £125,000 anyway, but in places like Scotland, Wales and Midlands the markets are more vulnerable to the changes.

Our clients are telling us, having lost trust in pensions, endowments, shares and not least the banks, in fact the entire financial services sector, they are storing their capital in physical assets. First and foremost bricks and mortar, things that they can see, touch and control.

This store-of-value argument will probably put some kind of floor under current prices.
In short, average prices will probably stand still for two or three years and then grow gradually.