Stamp Duty : £9,000. Guvmints are evil. FACT.

[Cort Haus]

It's NOT puny, Spiff. Wake up and smell the coffee!

Just because it's 'only' 3% of the property cost doesn't make it a trifle. Of course the property prices are raving barmy - and all the more reason for a decent government to ease the serious financial pain of their people by reducing their own obscene and rapidly escalating cut.

Yes, property prices are the root cause but your position is like a doctor who refuses to alleviate the pain of a patients illness because it doesn't fix the causes.

My point is simple. The govt should own up to their policy of creaming extra ££s from housebuyers misery, and reduce that percentage.

[CerberusIV]

Action - Government reduces tax on purchasing property.

Probable result - property seems cheaper, more demand, prices go up even faster.

[Kuciwalker]

A reduction in tax will result in an increase in supply.

[DinoDoc]

Re: Stamp Duty : £9,000. Guvmints are evil. FACT.

Originally posted by Cort Haus
we now find that our potential home will cost a 'stamp duty'

Didn't they learn thier lesson about that when we kicked them out of the USA?

[Cort Haus]

Originally posted by CerberusIV
Action - Government reduces tax on purchasing property.

Probable result - property seems cheaper, more demand, prices go up even faster.

By this logic a 50% tax should be imposed.

[Dauphin]

Anyone know what the actual effect of tax is, rather than wild speculation? i.e Who suffers more in economic terms, the buyer or the seller. Does it depend on market conditions (e.g bull vs bear)? etc etc.

[Dauphin]

Originally posted by Kuciwalker
A reduction in tax will result in an increase in supply.

More fluid markets tend to lead to (or is it follow?) higher prices, reducing taxation increases fluidity.

Does that hold true for housing? I don't know...

[Kuciwalker]

More supply at higher prices, yes. Though the increased price probably wouldn't be more than the tax itself.

[Dauphin]

Whilst that would hold true for stable markets, I wouldn't be confident enough to claim that for the irrational housing market.

As it is, housing costs are bunching up at just below the stamp duty thresholds. Without the psychological barrier, who knows what might happen.

[Spiffor]

Originally posted by Cort Haus
It's NOT puny, Spiff. Wake up and smell the coffee!

I know it's NOT a puny amount. However, I also know that, if you wait two monthes (and such a time is a trifle), you're gonna shell out these 9000 even if the tax was wholly removed.

Personally, this is why I don't bother saving for a house anymore. I know that the prices increase faster that I can gather the money (and about ten times faster than the interest). As a result, I'm waiting for the prices to fall, or at least to be back in line with regular inflation.

I'm not familiar with the market in London, but I can't imagine these absurd prices remain so high much longer. Your Poles are gonna leave in a few years, your economy isn't as attractive to foreign Europeans as it used to be, fewer and fewer people are able to afford buying, and maybe the government will actually do something about housing supply (I know that people over here ***** so much about housing that even our right wing government has to do something if it wants to get re-elected).

You certainly know the London market better than I. But if I was you, I'd really ponder if it's a good idea to buy in this juncture of massive inflation. If the prices were to fall at a later date (and they will, the question is "when?"), you might end up losing much, much more than 9000 as the value of your flat plummets.

[Dauphin]

Blaming foreigners eh Spiff? The London market is expensive because of the City paying huge wages and bonuses, and having a large number of high earners living there.

[Spiffor]

Originally posted by Dauphin
Blaming foreigners eh Spiff?

IIRC there are only two EU countries that are fully open to immigration from new members: The UK and Ireland. As a result, there are more Poles in the UK than: 1. if all countries become fully open to immigration from new members (which will happen soon), and 2. if the new members' economies are getting better (the process should be complete in one generation).
These people need housing like everybody else, and thus put pressure on demand.

Besides, it's not only the Poles. Britain was (and still is, though to a lesser extent) one of the most attractive EU countries to emigrate to, when coming from western Europe. Jobs are easily found. And though most western European emigrants won't want to spend their whole life in London, they aren't shy about spending some years. They also need housing.

Both Eastern and Western Europeans won't put the same pressure on demand in the coming years. Ireland is becoming increasingly attractive to western Europeans, and the Eastern Europeans will both have more countries open to them, and less incentive to go west in general. As a result there won't be as much demographic pressure in London in a few years as there is now.

BTW, thanks implying I'm a xenophobe
It's not the foreigners I blame. It's the market. As far as housing goes, it is terribly lacking.

The London market is expensive because of the City paying huge wages and bonuses, and having a large number of high earners living there.

But does it amount in millions of people?

[Dauphin]

But does it amount in millions of people?

£8.8 billion in City bonuses expected this New Year, and add to that around 330,000 working in the City.

[Cort Haus]

Not all those 330,000 will be getting big christmas presents, but the city bonuses are certainly expected to influence the market in the next few months. They already have, as people are holding back from selling until after the new year, increasing demand.

If I was a young man like Spiff, I'd do what he's doing and hold off even thinking about it until sanity is restored, but that could take years and I can't wait that long.

I don't see Spiff's demographic point to be "Blaming foreigners", as Dauphin put it. This year's City bonuses don't explain how we got where we are, and those half-million Poles, or however many it is, have to live somewhere. The economy should be elastic enough to accomodate the benefits of these demographic changes, but unfortunately the obvious national need for a substantial increase in housing stock has not been a priority for recent goverments.

[Dauphin]

Lest people think I was serious, my accusation of 'blaming foreigners' was a tongue in cheek comment.