There has been a noticeable increase in property prices and there has also been a rush to buy property. This has been prevalent since the easing of the lockdown restrictions. According to reports from the Royal Institution of Chartered Surveyors (RICS), it reveals that the number of properties that are being put up for sale is not keeping up with the increasing buying demand.
The report from RICS also suggests that the main necessity that prospective buyers are looking for is more internal and external space. This is an understandable requirement given the situations with lockdown and people not wanting to be cooped up for long periods of time.
Most of us now recognise the importance of having access to space for our own mental health and that families have now been brought into focus during the pandemic. All of this adds up and the surge in property purchases is a reflection of us looking for a better lifestyle, starting with alternative accommodation.
One of the other main reasons for the surge in property purchases, is due to the stamp duty holiday. On properties valued at £500,000 or less, there had been a suspension of stamp duty which provides significant incentive for potential homebuyers. For example, on a property that costs £500,000, you could cut costs by as much as £15,000 due to the stamp duty holiday.
Between the 1st July 2021 and 30th September 2021, inclusive, if you were to buy a residential property in England you will start to pay stamp duty land tax on the amount that you pay for the property above £250,000.
The SDLT (stamp duty land tax) rates will revert back to the original levels before COVID on the 1st October.
The sudden increase in demand for properties have also raised other issues for estate agents and property sellers. Although properties are selling quickly on agents’ websites, the number of prospective buyers is exceeding the agents’ abilities to cope with organising viewings. In some cases, it’s been reported that agencies are requesting written proof of a potential buyer’s ability to purchase the property before they will arrange a property viewing.
It’s understandable that agents want to weed out the ‘sightseers’ who have no intention of buying a property, but the ways that estate agents are going about doing this can be scrutinised. There have been unconfirmed reports of one agent requesting £5 upfront in cash in order to view the property. There have also been other accounts of upfront fees being requested by agents where the fee is non-refundable should the potential buyer not show up. This just highlights how busy the market has become.
You should exercise caution if an estate agent requests any kind of fee as a condition for viewing a property. In addition, be cautious about providing your personal financial details to the agents before you see a property. If they don’t demonstrate how your data is being used and how it’s being stored securely, it might be wise to look somewhere else.
About Stuart Mosley
Stuart Mosley (CeFA, CeMap, CLTM) founded SJ Financial Solutions in June 2005 having spent 12 years with big corporates such as Halifax and Santander. He felt the personal touch and straight speaking was missing from financial and mortgage advice services and set up SJ Financial Solutions to change this.
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