Government’s new FirstBuy scheme sounds like good news. Is it?

For those who don’t know, FirstBuy is a new shared equity scheme, jointly funded by the Government and the construction industry to the tune of some £500million over the next two years. Designed to help hard-pressed first time buyers onto the property ladder, it was first announced in the Budget, and last week it was revealed that over 100 of the country’s leading house-builders have already signed up. At the same time, a number of major lenders have agreed to offer special 75% FirstBuy mortgages.

How does it work? Well, as long as your annual household income doesn’t exceed £60,000 and you can find a 5% deposit, the Government and the developer between them will stump up a further 20%, thereby effectively enabling you to put down a total of 25% on certain new-build properties, up to a maximum price of £280,000. The 20% will be in the form of a loan, interest-free for the first 5 years, to be paid off in full when the property is eventually sold on.

So, isn’t this good news? The house-builders obviously think so. But then they would – because with a lot of unsold stock on their hands, they look set to be the main beneficiaries. The fact is, the scheme only applies to new-build properties in certain specified developments – and you can bet your life these will the ones that the industry hasn’t been able to shift any other way. That hardly bodes well for their resale value. In any case, this is a shared equity scheme – so when you do come to sell, you will have to pay back not only the original 20% loan, but also 20% of any increase in value.

No wonder the house-builders are so keen!

But does all this matter, if the scheme succeeds in reigniting the housing market as a whole? Sadly, it won’t: firstly, because it is only expected to help around 10,000 first-time buyers, which is a drop in the ocean; and secondly, because new-build transactions are “chain-free” – so they will do nothing whatsoever to help boost wider sales.

Other than that, it’s a cracking idea! 

What can help me to sell ?

Q.        My house is well maintained and (generally speaking) pretty clean and tidy. Is there anything else I can do to enhance its appeal when people come to view it?

A.            Basically, we’re talking about ambience. This can be very important, because whether we realise it or not, we are all sensitive to the “feel” of a property. At the same time, it’s worth remembering that buyers are pretty savvy these days – they’ve probably all watched the same TV property shows as you - so they’re unlikely to be fooled by some of the more obvious clichés, like vases of flowers crammed into every conceivable nook and cranny, or cheap tricks like dishes of vanilla essence placed in a warm oven to fake the smell of fresh-baked cakes.

In fact, it’s generally the simplest and most obvious things that have the most impact. For example, studies show that people react more positively to properties that are brightly lit. So, during the day, keep curtains wide open and windows clean. At night, switch on all the lights, making sure that there are no blown bulbs or flickering fluorescent tubes.

Next, sound. Personally, I always consider that the best and most restful way in which to view a property is in complete peace and quiet - although again, some people simply can’t resist putting on a little light classical music, in the belief that this helps create a calm atmosphere. And maybe they’re right. Either way, you should certainly try to avoid any loud, jarring noise. And make sure that the TV is turned off for the duration of the viewing.

Talking of loud noises, it can also be worth mentioning to your neighbours that you’ve got someone coming round to view your home – particularly if you know they are planning a bit of DIY. Even if it’s coming from next door, the sound of a hammer drill can be a trifle off-putting!

Lastly, smell. This has more impact than you might think, and it can work either for or against you. As with sound, I always think the best smell is the essentially neutral aroma of a good, clean home – particularly important in kitchens and bathrooms, of course, but equally so if you have pets. Simply masking unpleasant odors with chemical air fresheners is no substitute for a serious springclean!

The exciting world of stamp duty, a quick guide .

Stamp Duty – or Stamp Duty Land Tax, to give it its full title – is one of the most significant costs associated with buying and selling property. Unlike agency fees, however, which are generally paid by the seller, Stamp Duty is paid by the buyer. Precisely why the person who has just forked out hundreds of thousands of pounds to purchase something – as opposed to the seller, who has presumably just made a tidy profit on the transaction -- should also be obliged to pay thousands more to the Government, is just one of the peculiarities of a tax that most people agree is in urgent need of a radical overhaul.

Stamp Duty is levied at different rates, based on the value of the property concerned – as follows:

·         Up to £125,000 – 0%

·         £125,001-£250,000 – 1%

·         £250,001-£500,000 – 3%

·         £500,001-£1million – 4%

·         Anything over £1million – 5%

Currently, as a temporary concession, first time buyers only are exempt from Stamp Duty on any purchase up to £250,000. However, as always, terms and conditions apply – not least, the fact that the buyer must be able to show that he or she has never previously owned a property anywhere in the world! There are other situations where exemptions also apply – including properties in areas that the Government considers to be disadvantaged and, of course, so-called “zero carbon” homes.

As thing stand, however, the entire Stamp Duty regime is deeply flawed.  With the exception of the 5% rate, which was only introduced in April this year, none of the higher-rate thresholds have been increased since 1997, despite average house prices having rocketed by the best part of 200% since then. Consequently, the thresholds are now ludicrously out of line with current property values.

However, arguably an even bigger problem is the fact that once a threshold has been passed, Stamp Duty is levied on the full purchase price, and not just on the extra amount. Needless to say, this can have a significant distorting effect on property prices close to the thresholds.

So, will this or any other Government grasp the nettle and institute a root and branch reform of SDLT? Sadly, in these cash-strapped times, I wouldn’t hold your breath!

Bungalow-tastic !

  It seems the new year has brought with it a number of people wanting to sell bungalows, they may be short on stairs but are high on appeal.

  Its not only the older generation that are moving into them either, just last week we sold a detached bungalow to a young couple that had recently become parents for the first time. For them the appeal of no stairs and generous room sizes along with the potential re-sale potential was too good to miss out on.

  So "what bungalows do you currently have to offer?" I hear you say in an overenthusiastic tone. Well being part of the TEAM network we currently have around 30 to offer for sale (follow this link for the full list: http://bit.ly/gsXdTP  ) so I will round up 3 of my personal favourites.



http://bit.ly/hhhrsT This 3 bedroom detached bungalow is situated in the popular Worlebury area of Weston super Mare, offering plenty of space along with the scope to extend into a good sized family home makes this one of the most popular properties on our books. It is being offered with no onward chain with an asking price of  £229,950.

http://bit.ly/fu1GDa Another 3 bed detached bungalow this time found in the predominately family area of Mead Vale. Offering plenty of space both inside and out and only a stones thrown from one of the most highly rated primary schools in North Somerset, Woodpecker drive is an ideal location for many people.

http://bit.ly/gm6Fd8 Finally this may be one of our smallest properties but for the older person wanting to down size this would be ideal. 2 bedrooms and pleasant gardens set on a level location, a short walk from Worle high street for under £140,000.

happy hunting.

Jon