Home prices in the UK continue to increase. Financial institution Nationwide revealed that annual growth in September grew to 2.5% from the previous 2.3%. Overall, prices went up 0.2% between September and October. This figure is not that different from the findings of Halifax, one of the country’s biggest lenders.
Based on its newest House Price Index, the annual growth rate in October was 4.5%, which was beyond what the Royal Institution of Chartered Surveyors predicted. The cost of housing over the last three months was also higher than the previous quarter. The overall growth so far is 0.3%.
What is Driving These High Home Prices?
Although many factors can affect the fluctuations in home prices, they still follow the basic principle of supply and demand.
Robert Gardner, chief economist of Nationwide, stated that the lack of available homes in the market helps sustain the demand and increasing home prices. What further fuels this is the much lower mortgage rates, which encourage more buyers.
Time to Bring the Costs Down
Home prices are usually beyond the control of buyers. It is more macro in scope that even the overall economy of the country can have an impact. Potential homeowners, however, can take some concrete steps to help save on costs during purchase.
Experts in Stampcalculator.co.uk recommend paying more attention to stamp duty land taxes, which applies to the entire sovereign state except for Scotland. Often ignored, it can increase your overall purchase price in two ways — rate bands and fines and penalties for failing to file a tax return.
In general, people have to pay the tax if the home purchase price exceeds £125,000 for the first home and £40,000 for the second home. The stamp duty rates can vary, but the disparity can be huge.
Anybody who bought a property should file a tax return, whether they are exempted from paying stamp duty or not. Otherwise, they have to settle penalty fees, which can be as high as 30% of the duty.
A simple calculator can help buyers assess not only the stamp duty, but how much to allocate for the purchase of the property.
They can also bring prices down further by paying at least 20% down payment to avoid spending on private mortgage insurance, getting access to more mortgage options, and negotiating a more favourable interest rate for repayments.