According to the research, barring shared ownership and auction properties, houseboats and retirement homes, the cheapest property on the market today in the capital is a studio flat located in Hornchurch, which the estate agent is asking for offers over £100,000.
With stamp duty rates kicking in on properties with a purchase price above £125,000, there are currently just four properties in London that are stamp duty exempt. The standard 0% stamp duty band covers properties with a purchase price of £0 up to £125,000. However, first time buyers are exempt from paying any stamp duty on properties up to £300,000.
Sam Mitchell, CEO of HouseSimple, commented: “The death of the £100,000 property in London was inevitable, but with just four properties on the market at under £125,000, this will very soon be the new price floor for the capital’s property market.
This research highlights the need for properties at the lower end of the market. Shared Ownership and Help to Buy have helped people on average incomes get a foot on the ladder, but both schemes have their critics. It can be complicated to sell a property if you only have a small stake in it, and expensive to increase your stake, as there are additional costs to consider. While Help to Buy has been criticised for actually pushing up house prices and providing a vehicle for developers to inflate new build values.
London prices cooling will help buyers, but we should be careful wishing for a Brexit slump, because even a 10-20% drop in prices could push thousands of people into negative equity and unable to move. That wouldn’t be a good outcome for anyone.”
