Words from Jonnie

WORLD

TV presenter and property expert Jonnie Irwin gives his thoughts and views on first time buyers and the housing market

I’m a fire-starter, a twisted fire-starter. It’s true; bonfires have always been a strangely ritual thing in my family. Take bonfire night or Guy Fawkes night; it was always a big occasion on the farm where I grew up. We would dump off-cuts and old trees on the unlit fire throughout the year until it would reach house-size proportions by 5 November.

My dad was particularly keen on a special trick involving throwing red diesel from a big can on to the embers to get it going again and causing a mini explosion. Looking back, it was a little like the start of Casualty and how none of us ended up in A&E is nothing short of a miracle. Obviously, as kids, my sisters and I would love this and I’m confident it’s given us all a bit of pyromania from a young age. Whenever anyone has a bonfire, for whatever reason, the pictures go straight on to our WhatsApp group to much encouragement and congratulations. I was reminded of this over the weekend while I had a small bonfire getting rid of some garden waste. I looked at the petrol can in my shed and thought “no Jonnie, don’t be an idiot” (much to the relief of my wife no doubt).

It’s this idea of pouring fuel on to the flames that I liken to the current Stamp Duty holiday. Without doubt, it’s been a great help to many first time buyers, but the effect it’s having on the market as a whole is quite worrying. The market right now is hot, perhaps the hottest I’ve seen in some areas (outside of London).

The fact that FTBs normally have to stump up huge cash figures in addition to their deposit can add years to their savings plans, and the temporary holiday in these payments has been welcomed by most. The Stamp Duty holiday did its job in kick-starting the market out of lockdown, but extending it at a time when there are also ultra-low interest rates and the market is almost out of control seemed a little out of touch – metaphorically pouring fuel on to an already burning fire. Now before you accuse me of sermonising from my ivory tower I’ll give you an alternative view. Nobody predicted the market would go as crazy as it has, but when it did kick off, the extension should’ve been restricted to FTBs only. I’m writing this en route to film for Escape to The Country and with a very healthy budget of a million pounds, they won’t have to pay Stamp Duty on the first £500,000. This is ridiculous; buyers with this kind of firepower are exactly the people who CAN afford to pay Stamp Duty and so they are increasing their budgets accordingly – affording to pay more. This issue is compounded by a huge number of buyers out there that haven’t spent money on family holidays, restaurants or going anywhere for over a year and who are a bit tired of their own four walls so now want to spend the money they have inadvertently saved to move to places with more space. And so, the upward trend continues. Add to this the revenue in tax that the Government has seemingly turned its nose up at like an old pair of trainers and it looks like a knee-jerk policy that wasn’t really thought through. Don’t get me wrong, I’m not sermonising from my ivory tower. There is a real threat that the market will recalibrate its pricing from the top down, where the top end properties increase their price in line with demand and that trickles down through the middle market eventually inflating the price of FTB properties, which is surely the opposite of what we need? There is, however, some more promising news on the horizon. While property asking prices are still rising, they are doing so at a markedly lower rate. I know many of us will be lamenting the end of the Stamp Duty holiday, but the last thing we need is for the market to continually hurtle upwards like a runaway train – that never ends well. We will have to wait and see, but what you as a buyer can do in the meantime is persevere and keep communicating. With more and more anecdotes of vendors putting up the price mid-deal (it happened to me on the day of exchange), the best foot forward is to keep talking to the selling agent and keep hassling your conveyancing solicitor. Get the property over the line as soon as you can in a market where the competition is fierce. In the meantime, I live in hope that someone with some property background can advise the G overnment on a well thought-out scheme where FTBs are solely favoured and assisted that works alongside the current provisions of Help to Buy and shared ownership. Will it happen? We’ll see…