The impending budget speech has everyone anxious and for good reason. Potential changes include a hike in VAT to 16%, as well as an increase in Capital Gains Tax (CGT). This all impacts the residential property market, potentially compromising homeowners as costs increase constraining an already tight budget.
Lloyd Hobson, national sales manager of Leadhome, says that while it all seems doom and gloom, for buyers, these headwinds can create opportunity.
Hobson says that a flat market creates great opportunities for those looking to invest. In this scenario, it is ideal for buyers to shop around and compare bond interest rate offerings as well as homeowner’s insurance. There is no need to simply accept what is offered by the banks, rather actively pursue good offers from several organisations. Buying in these circumstances does require a more long-term approach. Hobson says there is no short-term gain from investing in property currently.
He also believes that a VAT and CGT increase may lead to further emigration or sales of homes because of the owners being in financial distress. Many of the latter will most likely audit their lifestyle and seek ways to downsize and reduce expenses. This potential influx of properties could bode well for buyers, but for sellers, only homes priced right will sell. Hobson advises to list and sell, don’t wait to try to achieve an unrealistic price.
It would seem that no matter the economic circumstances, buyers are going to remain spoilt for choice, while the rest of the market grapples with another tough economic year.