Stamp duty for buyers of property between £250,000 and £500,000 is levied at three per cent of the total purchase price. This rises to four per cent on acquisitions over £500,000 and the start of the financial year in April will see a new rate of five per cent charged for the privilege of paying more than £1,000,000 for your dream home.
As such you might forgive me for suggesting that paying an estate agent in Yorkshire somewhere towards 1.5 per cent plus VAT for selling your home does not seem that expensive by comparison, especially when you also consider commission rates of four to five per cent in Europe and US are commonplace.
However, when added to the burden of stamp duty, it is perhaps not surprising that some property owners have stood back and thought long and hard as to whether it is actually worth moving. This got me thinking “why would I move house in 2011?”
For some, it is very tempting to simply stay put, do the decorations you have been promising yourself for ages and refit the kitchen and bathroom in the styles advocated by the plethora of interior designers on television.
Some houses might suit an extension and allow you to finally have the extra room for the children to make a mess in. But then do you really want to stay in the same house for another five to 10 years until they have all flown the nest?
The decision as to whether to stay and improve or purchase afresh may well make itself.
The three Ds (debt, divorce and death) are obvious selling reasons in themselves, but for others, job relocation is often the principal reason. This might explain why 26 per cent of my buyers in Yorkshire in 2010 came from out of the region.
Personally, I think 2011 could be a good time to move and I assure you that is not simply said through professional self-interest.
Sellers are being increasingly realistic in their expectations and are pricing accordingly. Those who are new to the market this year cannot ignore the evidence of the last 12 months, nor will they be blind to the economic uncertainties that might be ahead.
The debate regarding interest rates is intensifying, but yet they remain fundamentally low, and yes, mortgage finance is available on terms that are perhaps best described as sensible and realistic.
There are buyers in the market place and increasingly they are adopting the car buying strategy of “cost to upgrade” and are bidding accordingly, taking account of the associated costs to move such as stamp duty, estate agency and legal fees.
So there is activity in the marketplace, viewings are up and sales are being agreed. It does also seem in many people’s mindset that we are now finally heading towards the spring, having hopefully had the worst of the winter before Christmas.
I urge those of you who are thinking of selling and/or buying to focus on what you ultimately want to achieve. Does your present house provide what you want, even if you improve it are you still going to be happy? If not consider moving.
Can it be extended to give you what you want? If so do the numbers, it might be cheaper to stay put, but then it might be cheaper and easier to buy something that is already the right size or specification.
For many, it is simply a question of maintaining and affording the differential between sale and purchase, in which case is it worth finding out what your present house is worth by putting it up for sale?
You could also be pleasantly surprised what might be available to purchase, particularly as more houses come on to the market as we move in to the traditional spring selling season.
Tim Waring is a partner of Knight Frank and heads their estate agency team in Yorkshire.