Selling Issues Answered

MANSION TAX

I’m selling my house but it’s marketed at just over £2m, will the new 7% stamp duty band effect my sale, and if so how?

Rather than use this column to rant about the idiocy of stamp duty land tax in general, we’ll cut to the chase. If you’re selling a property valued anywhere between £2m and £3m the short answer is ‘yes’. At prices above £3m the new 7% rate still applies, but the affect of the step (from 5% to 7%) that kicks in at £2m is less pronounced, and therefore poses less of an obstacle to a sale.

In the twilight zone between £2m and £3m, and particularly close to the £2m cutoff, the extra cost of the tax could be a thorn in the side of your sale, or more to the point, your buyer. A number of options exist to mitigate this. We’re already seeing owners offer to cover the extra 2% themselves, thereby removing any additional obstacle for the buyer. Another common tactic is to split the increase equally between buyer and seller, 1% each. For property marketed prior to April, either of these strategies seems sensible, with the choice being a matter of negotiation and the former being much more likely the longer the property has been on the market.

However, as the new rate gets priced into the market over the rest of this year, sellers will get away with being less and less accommodating, even very close to the £2m mark. Eventually, only in the immediate vicinity of £2m (up to £2.1m) should sellers be prepared for negotiation.

SELLER BEWARE?

I’m putting my house on the market, what preparation do I need to do, if any?

There’s a lot you can do to make your property more attractive to potential buyers, and a few things you should avoid too. Here’s our list of the top three issues most likely to prevent you achieving a top price:

Tenants – whether the property is kept untidy, cluttered or plain dirty, or simply because access for viewings is restricted on evenings and weekends, tenants can negatively affect the resale value of your property, even without meaning to.

Too much stuff – if you’ve got a lot of stuff and are serious about selling, get the excess out of the property and into storage. We’re talking about excess trinkets and photos on the mantle piece, that extra sofa, the drawers in the hallway, clutter on the shelves, etc. No matter how good a buyer’s imagination, too much stuff makes your property look smaller and less desirable. On the other hand not having any furniture is a classic mistake made in newly developed property. For the maximum price you need the right amount of the right furniture in the right place.

Being present at viewings – most people buy a property that ‘feels right’. By that they mean that it feels like it could be their home. If the current owner is present at a viewing, subconsciously it’s harder for a buyer to imagine it as their home, not yours. On a practical level, being present can also make buyers feel uncomfortable and prevent them from asking questions freely. This all reduces buyer engagement, and can mean they associate negative feelings with the viewing – not ideal.