Author: Antony Antoniou

Stamp duty specialist consultancy Cornerstone Tax claims some 120,000 buyers in the UK may be owed SDLT refunds.

It says that in 2017/18, over £12.9 billion in stamp duty was paid by homebuyers in the UK, while in 2016/17 alone over 6,800 additional property refunds totalling £80m were paid.

Cornerstone says it has been estimated that over £3 billion has been overpaid in stamp duty in 2015/16 mostly because of confusion by legal advisers unable to master the complexity of the tax.

The company says a new survey shows 61 per cent of homebuyers have never considered whether there was a mistake in the stamp duty they paid but 13 per cent feel they were forced to pay too much stamp duty in error due to their solicitor.

David Hannah, principle consultant and founder of Cornerstone Tax, explains: “While the percentage payment bands at higher property values is fairly straightforward, the number of exemptions and surcharges on different kinds of homes becomes incredibly confusing for even the solicitors and conveyancers advising on these transactions.

“The law around SDLT is incredibly complex and many advisors who help consumers evaluate how much they should pay are trained only to differentiate between residential and commercial property.

“They simply aren’t familiar with the intricacies of the law’s evaluation criteria, which has led to many consumers being mis-advised unintentionally. There are a number of other reasons why people have overpaid; it’s not always a misinterpretation of the three per cent surcharge.”

A survey says many people under-estimate the costs of moving with conveyancing and mortgage fees often higher than expected.

Some 54 per cent of those questioned in the Comparethemarket study found the process of moving home more expensive than they initially thought.

The survey found that in total moving costs can now add up to £9,500 – although it’s currently less thanks to the temporary stamp duty holiday.

Excluding SDLT, the deposit and estate agency fees, the top five biggest costs for homemovers were conveyancing fees, buying new furniture, mortgage fees, professional removals and decorating or improving the previous property before moving.

Forty two per cent of homeowners also stumble upon unexpected costs and charges when moving home, with the average amount spent totalling nearly £1,500.

Mortgage product fees, conveyancing charges and moving home supplies – materials and food covering the move – are the top three factors that homemovers had not fully accounted for.

To cover these surprise costs, over half had to dip into their own savings and an additional one quarter relied on a credit card.

Meanwhile the same survey has revealed the average distance moved by homemovers is over 20 kilometres..

But a fifth only move between one to five kilometres away from their old home, and another fifth move between six and 10 kilometres away.

The so-called ‘trade up gap’ for people buying for the second time has grown to a record £67,761 according to Rightmove.

The study is based on the average asking prices of almost three million properties, and operates on the basis of second home buyers already owning a two bedroom home and now wanting a three bedroom unit.

Over the past five years, the price growth of three bedroom houses has outstripped the price growth of two bedroom flats every year.

Outside London, asking prices for three bedroom homes are up 20 per cent nationally compared to 2015, compared to a 15% jump for two bedroom flats. Over the past year, two bedroom flats are up just three per cent to £171,751 and three bedroom homes are up four per cent to £239,512 on average.

Analysis for London – excluding prime London to remove luxury flats from the statistics – shows a trade up gap of £79,112, from an average of £486,464 for a two bed flat, to £565,576 for a three bed house.

Asking prices in the capital are up 15 per cent for three bedroom homes compared to 2015, compared to an uplift of only five per cent for two bedroom flats. Over the past year, two bedroom flats are up two per cent and three bedroom homes are up four per cent in London.

Those trying to move from a three to a four bed home, potentially for extra rooms to work from home, will need to contend with an even bigger jump of £183,093 outside London, with asking prices growing 15 per cent over the past five years.

In London, average asking price growth for four bed homes has grown by 10 per cent over the last five years, as this property type actually dropped in value between 2016 and 2018.

The trade up gap varies dramatically at a local level. In Swansea, a move from a two bedroom flat to a three bedroom home has a difference of only £11,000, whereas in Esher in Surrey there is a massive £300,000 difference.

Rightmove’s director of property data Tim Bannister, explains: “People who bought a smaller home five years ago and are now hoping to trade up will find it’s harder to afford the next rung of the ladder because of the different pace of the sectors.

“Those who really need the space and are struggling to trade up could widen their search area to find alternative places where they can get more for their money, or they may need to compromise on the type of home and opt for a terraced rather than detached.

“The cash jump is even bigger from three to four beds, likely due to four bed homes often having additional bathrooms, bigger gardens, garages or outbuildings, as well as an extra bedroom, but traditionally homeowners stay in their second home longer and so more people may have built up enough equity to make the jump to their forever home.”

“Accidental savers” who put money aside during the lockdowns are piling into the housing market and will drive up UK asking prices by four per cent in 2021.

As many as 650,000 properties are due to change hands in the first quarter of next year while fresh buyers will try to find, buy and complete on a new home before the end of the stamp duty holiday window on March 31, according to Rightmove.

“The new year is typically a time for resolutions and many will see it as an opportunity to draw a line under 2020, which may well include a fresh start in a new home for those who have not already acted,” says Tim Bannister of Rightmove.

“Interest rates remain at near-record lows and we expect greater availability of low-deposit mortgages next year. These two factors will help to oil the wheels for home purchases by the accidental savers who have collectively saved £100 billion during the pandemic restrictions.”

The surge of demand to move house following the first national lockdown, stoked by the Chancellor’s tax break, has pumped prices up 6.6 per cent over the last 12 months to December taking the average UK asking price to £319,945.

The first leading agency to make a 2021 forecast says the market should be stable next year – so long as there’s a trade deal with the EU and a speedy end to the pandemic.

“Assuming a trade deal is agreed with the EU and a vaccine becomes available in the first half of next year, with no major second lockdown, we expect prices in Great Britain to remain flat in 2021” predicts Hamptons International.

The agency say 2021 will be challenging thanks to health and economic uncertainties.

“Although the wind down of government support measures means that unemployment is likely to peak in H1 2021, the economy should have made up some lost ground.  We also assume that a trade deal is agreed with the EU at the turn of the year and a vaccine becomes available in the first half of 2021” the agency continues.

It says there may be small price falls in the second quarter but as 2021 progresses there should be more stability.

“Providing the availability of mortgage finance returns to near pre-Covid levels, we expect house prices to remain flat in Great Britain in 2021, with small price falls in those regions likely to see the biggest job losses and where affordability barriers are already tight” according to Hamptons.

The West Midlands, the region that had the highest furlough take-up rate at the peak, is set to see the biggest price falls next year – down 1.5 per cent. London and the East Midlands will also see falls of 1.0 per cent or less.

Most other regions will have small rises.

Meanwhile transactions in Great Britain will reach one million this year, 1.1m in 2021 and then a higher level in 2022.

“The real challenges won’t be felt until 2021.  The economic consequences from the Covid-19- induced recession will pull the housing market from its long-term growth trajectory. While some economic recovery should have taken place to cushion the withdrawal of government support, we still expect the housing market to slow next year” anticipates Aneisha Beveridge, head of research at Hamptons International

“In line with a gradual economic recovery, we forecast house prices to rise again in 2022 and 2023.  The housing market will fall back in line with its historical cycle, with Northern regions expected to see the greatest price growth, further closing the gap with those in the South.”

A new PropTech product claims to help agents generate and nurture leads – even while they sleep.

MovePal generates leads through Facebook ads, agents’ databases, portals and other sources, and then nurtures those leads to keep an agent and its brand at the front of the prospect’s mind.

The new product – which joins ValPal, PortalPal and ChatPal in the Network’s suite of services for agents – aims to zone in on ‘hot’ leads for agents so they do not have to expend time and effort chasing after leads that come to nothing.

At the same time, a streamlined, all-in-one package is provided to enable agents not only to generate leads, but to nurture and convert them as well.

The software is designed to target and engage with prospects when they are ready to talk, increasing an agent’s chances of converting into a market appraisal or instruction.

The creators say that with Coronavirus stretching agents’ resources, this product means they have to spend less time spent chasing leads and business, freeing up more time to carry out market appraisals, valuations and viewings.

“MovePal, by combining lead generation with automated lead nurturing, offers an ideal solution for agencies wishing to automate the responsibility of lead generation, nurturing and conversion, leaving your agents to deal with hot prospects when they are ready to speak to you” according to Nat Daniels, founder and CEO of Angels Media, the company behind the product, and the company which publishes Estate Agent Today.

“Even better, MovePal identifies these for you, so cold-calls and hopeful pitches are not required. It’s more targeted, tailored, specific, which all saves time.”

Daniels says MovePal can best be described as a “personalised but automated two-way communication platform” using email, SMS and voice drops to keep an agent’s brand in front of all of its data.

Included alongside this is a range of long- and short-term nurture campaigns.

Research by The ValPal Network – another Angels Media product – suggests that 18 per cent of all those using instant online valuations go on to sell their property, accounting for nearly one in every five leads.

MovePal triggers digital marketing for new leads using Facebook Ads, Google Adwords, the agent’s own database, and inbound leads from the major portals.

One of the growing number of free to list property portals, Residential People, claims a record-breaking number of sales and letting enquiries in August.

The figures suggest it delivered 150,000 sales and lettings enquiries to its agents across the UK.

Director Christopher May says: “We have been established for well over two years now and have seen unprecedented support from agents since our inception. We have always endeavoured to deliver a viable alternative to fellow portals on the marketplace. This vision has been our driving force behind our launches in the UK as well as other key markets such as UAE, South Africa and India.”

The portal – which has a target of 10m listings by the end of 2021 and one million enquiries by the end of March next year – says it is now working on a new Artificial Intelligence platform which it describes as having been “co-developed with agents over the last two years.”

May says: “Our clever AI data platform is currently being beta tested and will be ready to launch in December. The platform will help local agents stand out in their respective areas like never before. We aim to not only offer agents more visibility but also provide them with powerful tools to help market their brand and increase their revenue exponentially.”

The portal says that because of the financial impact of Coronavirus on the industry, and the growing importance of brand awareness and financial stability, the new platform will “place greater emphasis on these aspects while striking a balance between driving down an agent’s marketing costs without sacrificing enquiries. “

And he adds: “Gone are the days of blind advertising such as door-to-door mail delivery and listing on expensive property portals. With our new platform, we guarantee that any agent who uses the system will dominate their chosen area within 12 months.The launch of the new platform is coming soon, and we urge interested agents to become early adopters to enjoy the preferential terms.”

Commercial People – the parent company of the residential portal – also operates a commercial property portal with the specific name Commercial People.

Last month the OneDome Group – which operates the OneDome and Nethouseprices websites, also free-to-list – reported a combined 1.7m unique monthly visitors in July, up from 1.5m in June.

During July the OneDome websites also generated 170,000 buyer and tenant leads for agents.

It says strong activity levels have been down to a combination of the stamp duty holiday and the continued release of pent-up demand following lockdown.

The regional agency group which master-minded the Say No To Rightmove campaign has made a big commitment to the future of High Street branches with a new 3,000 square foot office in a town centre.

The Acorn Group, which also operates the John Payne and Langford Russell brands in London and the south east, has launched the new office in the Kent town of Strood. It is the group’s 37th office.

Coronavirus had put a temporary halt to The Acorn Group’s expansion along the north Kent corridor which had seen it open eight new offices in the past two years – but now the expansion programme is back on course.

“This is the result of many months of hard work and planning” explains Rob Sargent, Acorn Group chief executive and leader of the Say No To Rightmove campaign.

“We are strong believers in the High Street model and our airy, well-spaced office is designed to be Covid-secure for the safety of both our staff and our clients” he continues.

“If anything, the events of 2020 have increased this migratory demand as homeowners and tenants, who have witnessed the perceived shortcomings of urban living, look to find a home with more space, inside and out.”

The government claims its stamp duty holiday has supported nearly 750,000 jobs thanks to the ripple effect in the economy.

A statement from HM Treasury says house sales rose 15.6 per cent in August following the introduction of the stamp duty holiday, following a 14.5 per cent rise in July – partly, at least, down to pent-up demand after the spring lockdown.

The increase in transactions came after Chancellor Rishi Sunak announced a temporary stamp duty holiday for residential properties worth up to £500,000 from July 8 until March 31.

The Treasury calculates the holiday means nine out of 10 buyers will pay no SDLT at all, with an average saving of £4,500.

The government calculates the 750,000 figure by including businesses across the housing supply chain and beyond, with the Bank of England estimating that households who move home being more likely to purchase durable goods such as furniture, carpets or major appliances.

It is expected that housebuilders, estate agents, tradespeople, DIY stores, removal and cleaning firms could all benefit from the increased activity.

“Every home sold means more jobs protected – helping us to deliver on our Plan for Jobs. But this isn’t just about the housing market” says a statement from Sunak.

“Owners doing up their homes to sell and buyers reinvesting stamp duty savings to make their new house feel like a home are also firing up local businesses, supporting, creating and protecting jobs across the country.”

To bolster its argument, the government cites figures from the Building Societies Association showing a sentiment change amongst buyers, while separate data from Checkatrade shows more than one in 10 Britons hope to buy before the end of June, with a third spending their saved stamp duty payment on improvements and renovations.