What is the new UK stamp duty all about and what does it mean for the property market? This is a common concern as many people are still unsure of what this new stamp duty threshold will mean. Here is an overview of the differences now in effect and what this could mean to the home buyer and the property investor.

The rise of the rate of the stamp duty from £125,000 to £175,000 could mean big changes for house buyers and sellers in and across the UK. Beginning September 3, 2008, there are new thresholds on the Stamp Duty. If the purchase price is under £175,000, you don’t have to pay the Stamp Duty at all.  This is a temporary measure but may be here to stay.

Here is a chart that shows the current rate of the Stamp Duty Land Tax:

These new thresholds will change the amount of taxes involved in purchasing property in the UK and could be a good thing for many investors. There is also a change in property purchased in government designated “disadvantaged” areas. Properties that previously qualified under the Disadvantaged Area Relief will now qualify under the higher threshold of the Stamp Duty.

What this means

New research has shown that this stamp duty break could inject new life into certain areas such as North East England and Wales. This could increase the population and create new opportunities for UK property investors. Statistics show that around 50% of the properties recently sold in England and Wales were sold below the threshold for the Stamp Duty tax to be in effect. In the North East, you can find an even better bargain at nearly 78% of the properties there falling below £175,000.

First time buyers may flock to these areas for the affordable pricing and the stamp duty tax break but this is also good news for investors looking to expand or even the person just starting out in UK property investing and looking for a good deal.

Other nice areas for the UK property investor to look into are Scotland where 68% of homes are sold for under £175,000 and the North West (72%), Yorkshire and the Humber (72%) and Wales (71%). Buyers looking for a deal are encouraged to avoid London where only about 13% are sold under this threshold and specifically the areas of Hammersmith and Fulham in west London where only 1% of homes sold were under £175,000.

Research shows that there are certain areas that just aren’t worth the expense for a first time home buyer or investor. You should seek areas such as Chester-le-Street in County Durham of the North East, where 94% of properties avoid stamp duty. This can be a great option in affordable housing and can save you as much as £1,750 in additional home buying costs.

Making use of the stamp duty thresholds

As an investor, you can make use of the stamp duty thresholds as we mentioned above. When you shop around for the most ideal locations to invest in property, you can find some great deals. Many investors also find it beneficial to seek the services of a referral company. Often you can find out about properties and deals that you would not have been able to find without them so the expense can be well worth it.

Buying properties below the stamp duty thresholds helps you save more on your purchases with makes it easier to see a profit in your investments.

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Buying property abroad is becoming more popular than ever and thousands of people every year are realising their dream and either investing or moving abroad. I have written a 3 part guide to help you with the process of buying abroad.

Before you buy

Always do your research and asking yourself some basic questions, this will help you immensely in the long run. Here is a list of questions you should ask yourself. Write these down on a sheet of paper and keep in your property research file.

There are three areas of buying we will concentrate on:

Why are you buying – For investment, holiday home, permanent move?

For investment

How much can you really afford to put into a property abroad?

This seems a very basic question but one that a lot of people have not really thought about. Investors are human too and can get caught up with their hearts ruling their head and get excited about potential claims that their property could be worth thousands more ina few years time. Do the sums and make sure you can afford to lose what you are going to put into your investment, in other words don’t put all your eggs in one basket.

How long can you tie yourself into the investment?

Are you planning on investing long term e.g. a buy to let or do you want to buy off plan and sell immediately after completion. If you have a great location in a high end market then letting could be a great way to bring in money whilst paying for the property. Make sure your potential rental yield is high enough before investing in a buy to let.

Where are the current hotspots?

This will take some research in itself but there are plenty of websites willing to help you out on this one. Go to property seminars and property trade shows to get some idea.

Is the economy stable?

Again all the research can be done on the internet, join forums and ask questions and check the reputation of the people in there before taking advice. Some good property forums are:

www.totallyproperty.com/

www.propertysecrets.net

www.themovechannel.com/forum

If you can’t sell the property immediately would it be a good letting area?

Always have a backup plan. If you were planning on selling immediately and it doesn’t work out make sure the property you buy is good enough for letting as well as selling immediately. This way you cover your bases.

How close is the airport to your property?

This is often overlooked by investors. If your property is 50 miles away from an airport you have less chance of that property being rented out all year round. So if you are planning on a buy to let property make sure it is near an airport. On the flip side if it does not have an airport and you know there will be one soon, it could be an area to invest in before prices start to rise. An airport being built or a new route to your area of choice is a good indicator that your area is up and coming.

Does the area have good transport links?

Nothing worse that being stuck in the middle of nowhere and no good transport to take you round the area.

Is it easy to buy in your country of choice?

Another important area to look into is the legal side of buying and selling abroad. Make sure you enlist the help of an English speaking expert to help you in this area and they can be your guide to buying property abroad. There are charlatans out there so if you know someone who has done this already ask them to recommend someone for you. Failing that go to the property forums and ask the question.

Is it easy to sell in your country of choice?

Again enlisting the help of an English speaking expert will help you a great deal and help you to avoid the pitfalls of the legal system in your country of choice.

Other websites to help you buy property abroad

www.homesabroad.uk.com/

www.owningabroad.co.uk/

www.worldproperties.com/

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The housing market moves in mysterious ways and currently agents are suffering more than canny sellers.

In our experience, more and more properties are being sold privately as buyers, anxious not to overspend in a falling market, look to secure bargains.

There is no shortage of stock out there and buyers seem to realise that if the seller can avoid an agency fee, then they can potentially reap those savings for themselves.

Many vendors, keen to sell but wary of over-exposing their property are displaying private ‘for sale’ boards outside their homes and marketing privately online in a low-stakes, low-risk attempt to drum up some interest. We all like to feel we’re getting a bargain, especially when times are tough (hence the increased success of discount supermarkets such as Aldi and Lidl as opposed to Tesco and Sainsbury’s). The housing market is no different and people always have to move. The difference now is that purchasers can choose where they shop. Why buy retail when you can buy wholesale?

Maria Kyriacos, who recently bought two flats to let privately says, “It’s a buyer’s market out there right now and buying privately is a whole lot easier than going through an agent. There’s no one phoning to harass you every five minutes and I’d rather the whole amount went to the seller, not an estate agent that’s barely lifted a finger for his commission.”

One private seller, Jackie Thomas said, “My husband and I recently sold our house privately. We had to move, we didn’t have a choice. We signed on with an agent to begin with but they were useless. Every week they would say, “Oh, it’s just been a bad week, things will pick up next week.” After two months with no viewings I’d had enough. Even if things did pick up I felt like I was being conned, why should I give them 1% of the sale? We decided to try and sell privately on the internet and suddenly we had three offers.”

For now, estate agents appear to have fallen desperately out of fashion as more and more sellers ask, “Why should I pay for something I can do myself?”

This article is written by Tim Jackson of Secure a Sale
www.secureasale.co.uk

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