UK Millionaire Home Sellers to Go Private

  • 14 years ago
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26/03/2010-The private sales & online estate agents website The Little House Company anticipates a rise in luxury home owners seeking an alternative way to sell their homes after an increase in stamp duty.
The increase announced by Chancellor Alistair Darling has had been received with mixed messages. The aim of the hike from 4 to 5 % was to fund the removal of stamp duty for first time buyers up to £250,000.  
However conveyancing lawyers in The Telegraph gave warning that many super-rich buyers, spending more than £2 million or so, would be able to legitimately avoid the new higher rate. Mr Marsh said: “There already are stamp duty land tax savings schemes, which are very complex and involve setting up offshore accounts. But if your stamp duty bill is approaching £20,000 some might think it is worth going down this route.
Alistair Darling said he would use extra revenue from sales of the most expensive properties in the country to fund a simultaneous increase in the lowest threshold for stamp duty of 1 per cent from £125,000 to £250,000 to help first-time buyers. Buyers of homes worth more than £500,000 currently pay a rate of 4 per cent. On a property worth £1 million, the new stamp duty bill will be £50,000 rather than £40,000.
Nick Marr Director at the Little House Company “The budget overall is good news for the housing market which is suffering owing to lenders who have become more stringent in their lending criteria. The million pound home owners are being squeezed and will not want to pay 1.5% to 2% commission charges as well as 5% stamp duty. Our average private seller’s house price is over £400,000 for this very reason and it makes sense they will seek an alternative to a traditional estate agent.
Liz Peace, chief executive of the British Property Federation, said:

“It will boost confidence in the housing market, but will be of limited value to first-time buyers who typically have to find a deposit of £33,000 at present. Raising the threshold will effectively knock 18 months off the 18 years it would take the typical 25 year-old to save a £33,000 deposit. If a 1% stamp duty payment is the difference between people being able to afford to buy a house, then they should not take the risk. What we really need here is more homes and better access to finance.

The number of mortgage approvals for house purchases in February stayed virtually flat on the low levels recorded in the previous month according to the British Bankers’ Association, as consumers remained uncertain about economic recovery.

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