Comment: the curious case of the prawns in the curtains
- Credit: PA Wire/Press Association Images
Stamp duty is still causing a big stink in London’s prime property market, and whilst there’s currently no cure for the curse of George Osborne the key is still in taking advice to price realistically
Whilst following the twitter commentary on last week’s column topic I found an early contender for my favourite piece of political commentary in 2017. Self defining ‘recovering’ Labour staffer Jo Green tweeted: ‘In 2010 the Tories could have backed a cross party plan they instead called a “death tax”. Another Cam/Osborne prawn sewn into the curtains.’
Perhaps it’s the mental image of David Cameron and George Osborne scurrying round Number 10 armed with a packet of Waitrose Duchy Organic king prawns and a hotel sewing kit that tickled me so much it stayed with me, but it struck me that it’s actually a pretty good metaphor for the legacy left behind for the property market. Osborne did leave some real surprise stinkers for Theresa May to contend with here.
Not that he needs to resort to soft furnishing skullduggery in his post politics life. With the Evening Standard at his command the newly minted editor has demonstrated that revenge is a dish best served on the front page.
Ask any estate agent and they’ll tell you the real seafood stitch up was Stamp Duty. From December 2014 to April 2016 the Chancellor of the Exchequer sewed a veritable seafood platter’s worth of legislation into the London property market’s drapery.
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By switching from the ‘slab’ system to a ‘slice’ and adding a three per cent surcharge for second homes Osborne improved the situation for everyone with a home valued at less than £937,000 but left those over the £1 million mark in a sticky situation.
By the time summer rolled around the prime property market had all but slowed to a gasping crawl, but the great stink kicked up by the Referendum result initially masked the pungent aroma of eau de stamp duty.
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But a year on from the tax changes and coming up for the anniversary of the Brexit vote the true culprit behind the whiff of stagnation is all too clear. Really expensive houses just aren’t selling like they used to.
It’s not just about keeping the estate agents in sports cars. The average house price in Camden as a borough is over £1.1 million. In Hampstead it’s over £1.7 million.
London’s squeezed middle classes are just as affected, if not more so.
Wealthy buyers can afford to be canny with their cash, and are opting to spend what they would on stamp duty on luxury rentals with a view to buy when the dust settles. Those who want or need to move now face a struggle.
Buyers don’t want to pay the tax, but sellers don’t want to back down on what they perceive to be the proper price by taking a reduction to sweeten the deal. As a result the property market has plateaud and the ladder has become jammed as people struggle to move up and down.
We are in very interesting times indeed when we have estate agents calling for sober property valuations. But this is not so much the lingering Osborne curse as it is the overload of data faced by today’s sellers. Thanks to online property listing portals anybody can find out what the average property price in their area is in a couple of clicks.
The headlines don’t help either, and I’ll admit the media are just as bad.
I used Zoopla to get those stats I quoted above, and I’m guilty of clicking straight on to the Rightmove house price index every month to see if I can get a juicy headline from it.
With a micro climate as delicate as north London expert guidance goes a long way. You’re free to hand your fee over to an online only agent of course, but its your High Street agent alone that can tell you why one house on one street might fetch a different price from another street over, or even why two neighbouring properties won’t match in price.
Online agents might send someone out to value your property in person, but they’re unlikely to have intimate knowledge of the local market.
It would be an arrogant agent indeed who would claim to sell your house easily in the current climate, but until the algorithms catch up – or May unpicks the prawns - it’s a safer bet.