Homebuyers shouldn't take house prices at face value, tax firm says

Prospective homebuyers shouldn’t take house prices at immediate face value and should instead be mindful of inflated prices, Cornerstone Tax has warned.

The consultant on property and Stamp Duty suggested house prices in some areas have increased since before the start of lockdown.

Cornerstone described the housing market as “often the greatest indicator” of the performance of an economy, but added that prices since the UK’s housing market reopened in May might not represent their “real value”.

The tax adviser has also recently warned that errors made in assessing Stamp Duty Land Tax on property purchases are actively harming the housing market and may be hampering investment in the industry.

Cornerstone principle consultant, David Hannah, said: “The past few weeks have been puzzling for many in the property market, while many would have expected a dip in prices and demand, the opposite has occurred. House prices have actually now increased in some areas since before the start of lockdown. It is important, however, to remember that these prices are mostly asking prices from the sellers – not the real value.

“Buyers should be mindful of real property value and wary on inflated prices. There is understandable concern to kickstart the market but that shouldn't come at the cost of artificial price inflation of prices.

“One thing is clear; post-pandemic there is likely to be a general economic uncertainty until our economy returns to full activity, the last thing we want to see is a property bubble which by its nature will eventually bring the market to a grinding halt. Pricing out first-time buyers, making stamp duty more and more expensive and generally acting to the detriment of a healthy market.”

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