What is the property you’re buying really worth?

The stamp duty holiday has backfired, and almost everywhere people could be paying more for homes rather than less

A hot topic I am repeatedly asked about in the current market and period of time before the Stamp Duty Holiday the chancellor has set for the end of June 2021. As you are aware, you won’t pay stamp duty on properties valued up to £500,000. From 30th June 2021 to 30th September 2021, the nil rate band will be reduced to £250,000, returning to normal levels. The laws of supply and demand in a property market with a general lack of stock may inflate prices, so are there other factors in addition in addition of the stamp duty holiday?

I have been undertaking numerous residential valuations for clients. Before exchanging contracts in many cases, my clients suspects agents of fuelling the property market by overvaluing property above and below £500,000. Mortgage applications and surveys are reportedly suffering delays amid backlogs and staffing issues in an attempt to meet the deadline. Provided with comparable evidence from the Land Registry within the last three months has been very helpful to buyers to understand what their property purchase may be worth. We always make a capital cost allowance when valuing properties with modern high levels of finish against those requiring a complete overhaul.

The Times reported on 8 April 2019, following their research, that several leading estate agents have been over-valuing homes by up to a fifth to win instructions while also charging some of the highest percentage fees. One agent, who set a 3% sales fee, revealed they reduced two-thirds of their listings before a sale. The report also claims that the ten agents who overvalue the most charge twice as much on average as the ten agents who overvalue the least. Two of the agents named in the report both said they “price properties competitively” and “strive to get the best price for their customers”.

The professional body for the property sector NAEA Propertymark told The Times it agreed that the research did not “put the industry in a good light”.

With the end of June stamp holiday a month away, we would be happy to advise clients exactly what their proposed house or commercial property is worth.

Stuart Scotland
27/5/21