The £125,000 threshold for when you start to pay SDLT was introduced again on 1 January 2010. The previous starting rate was £175,000 – for purchases made between 3 September 2008 and 31 December 2009.

If you buy a property in the UK over a certain purchase price you have to pay Stamp Duty Land Tax (SDLT). This is charged on all purchases of houses, flats and other land and buildings.

If you buy either a freehold or a leasehold property and the purchase price is more than £125,000, you pay SDLT of between one and four per cent of the whole purchase price. If the purchase price is £125,000 or less you don’t pay any SDLT.

See the table below for more detail.

SDLT Disadvantaged Areas Relief

If you buy property in an area designated by the government as ‘disadvantaged’ you may qualify for Disadvantaged Areas Relief. In this case the threshold for SDLT is £150,000.

Disadvantaged Areas Relief did not apply for residential property purchases between 3 September 2008 and 31 December 2009 inclusive. The threshold during that period was £175,000 which is higher than the previous Disadvantaged Areas Relief threshold. You can check the HMRC website to see if the property you are buying is in an area designated as disadvantaged.

According to a Nationwide report House prices rose in all regions except Northern Ireland during the fourth quarter of 2009, southern regions continued to experience stronger growth than northern regions and London saw the strongest growth in the quarter and also over the year. 
 
Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:
“The final quarter of 2009 saw a slowing in the quarterly rate of house price growth across the majority of UK regions, but most regions ended the year with average prices higher than at the end of 2008. For the UK as a whole, prices rose by 1.6% in the fourth quarter, leading to an increase in the annual rate of change from -3.0% in the third quarter to +3.4%.

“Greater London was the best performing region in the quarter; prices rose by a seasonally adjusted 3.4%. This increase pushed the annual rate of change up from -1.9% to 7.0%, making London the best performing region over 2009.

“Outside of London, the East Midlands saw the strongest quarterly performance within the English regions, with a 2.8% rise in prices over the quarter, bringing the annual rate of change up from -5.4% to 2.5%. The Outer Metropolitan and Outer South East regions continued to see above average growth in the quarter and were the second and third best performing regions, with annual growth of 6.4% and 5.5% respectively.

“The northern regions generally saw weaker growth, in particular the North where prices rose just 0.4% in the quarter. The North was also the only English region not to see prices rise across the year as a whole, with an annual price change of -2.0%.

“House prices in Scotland rose 1.9% during the quarter, slightly above the UK average. This was enough to push the annual rate of change into positive territory, with prices up 1.0% compared to the fourth quarter of 2008. Quarterly price growth in Wales remained relatively weak in the fourth quarter, with a 0.9% rise recorded, leaving average prices marginally lower than one year earlier.

“Reversing the large increase seen in the third quarter, prices in Northern Ireland fell by 6.8% in the fourth quarter. On an annual basis, house prices were down 6.7%, a modest improvement from the 8% year-on-year fall in the third quarter. Northern Ireland remains the worst performing UK region.

Wales top performing UK country over last decade

“Despite the sharp house price falls seen in 2008 and the first half of 2009, the 2000s has generally been a very strong decade in terms of house price growth. In nominal terms, house prices in the UK rose 117% between 1999 Q4 and 2009 Q4. Taking into account overall retail price inflation over the period, prices have risen by 68% in real terms, the strongest decade on record. This compares with a 14% fall in real terms during the 1990s.

“Wales has been the top performing country over the 2000s; house prices have risen 82% in real terms.  This sharply contrasts with the 1990s, where Wales saw prices fall by 24% in real terms.

“England overall has seen the weakest growth over the 2000s of 65%, although this has varied widely across the regions. Within England, Yorkshire and Humberside has seen the strongest growth, with prices rising 84% in real terms, whilst the Outer Metropolitan region has experienced the weakest growth, with a 51% increase.

The strong growth seen in Yorkshire and Humberside might reflect that it started the decade as one of the most affordable regions, with a house price to earnings ratio of 3.0 (compared with the UK average of 3.6 in 2000 Q1).

“Whilst the strong housing market performance of the 2000s is good news for homeowners, it is less positive for those looking to get on the housing ladder. Affordability has improved since the peak in house prices in 2007, but we will enter 2010 with house price to earnings ratios across the regions at a much higher level than the start of any other decade.”

According to the Confederation of British Industry (CBI), the UK economy is expected to exit the recession in the 4^th quarter of 2009, growth will remain “fragile” and subdued for some time to come, with GDP unlikely to reach pre-recession levels by the end of 2011.

 In its latest economic forecast published on 21^st December 2009, the CBI predicted the recession would end when UK growth resumes in the 4^th quarter of 2009, helped by consumers bringing their spending forward to beat the VAT rise.

However the business group added subsequent growth in the first two quarters of 2010 will be weak at 0.3 per cent, but this should strengthen as the global economic recovery gathers pace, businesses rebuild stocks and household spending recovers.

As a result, the CBI has predicted annual UK GDP growth of 2.5 per cent in 2011, following 1.2 per cent in 2010.

However, despite two years of economic expansion, UK GDP will still not have returned to its pre-recession level by the end of 2011, which illustrates the depth of the recession and the weakness of the economic recovery.

John Cridland, deputy director-general of the CBI, said: “The outlook is brightening as the global economy finds its feet, although we will need to keep our nerve during early 2010, and there is no sign of a clear driver of strong economic growth.

“In the spring many staff will face another cycle of wage freezes, and job losses will continue rising until the autumn. Although the first few months of 2010 will be difficult, growth will gradually pick up and increasing confidence and demand will lead the UK into a more positive 2011. Consumer spending looks to be slightly more resilient than we first thought, and a weaker pound will help to support export growth.”

“However, the economy will be on a fragile path of very slow growth, as we continue to feel the lasting effects of the financial crisis. And it remains vital that government sets out clearer plans to address the fiscal deficit at its next opportunity in order to help shore up future UK economic prospects.”

Meanwhile, the CBI expects unemployment to continue rising over the coming quarters, but peaking slightly lower than previously forecast, at just over 2.8m in the third quarter of 2010.

Elsewhere in the report, the CBI forecast that the planned VAT rise in January will push CPI inflation up sharply before it eases back during 2010 and falls below the Bank of England’s 2 % target throughout 2011.

The UK Bank rate is forecast to start rising in spring 2010, as the Bank of England withdraws some of the monetary stimulus in order to minimise the risk of undesirable inflationary pressure in the medium term.

The CBI said the Bank rate is expected to reach 2 per cent by the end of next year, with no further rises during 2011, to assist the sustainability of the recovery as fiscal policy begins to tighten.

Ian McCafferty, chief economic adviser at the CBI, said: “The UK economy faces a number of structural hurdles over the coming two years, and this recovery – like that of the 1980s – will be relatively drawn out.

“Credit conditions will remain difficult as the banks slowly nurse themselves back to health, consumer spending will be shaped by the need to rebuild savings, and the public sector will soon have to tighten its belt. All three factors will act as headwinds to growth.”

A new independent survey has found IFAs are rated by consumers as the “most fair” of the financial services professions.

The ‘Fairness Index’, produced by the Financial Services Research Forum at Nottingham University Business School, looks at consumer perceptions of fairness with regards to financial services. The Index takes into account a wide range of measures including impartiality, familiarity, courtesy and communication.

The Index found IFAs enjoy by far the highest ratings on overall fairness, with an index score of 84 out of 100, significantly higher than the industry average of 72. When the data is broken down further, IFAs also rate the highest across each of the fairness measurements.

Brokers/advisers were followed by building societies (75), investment companies (73), Life insurers (72), and general insurers (72). Banks (68) and credit card companies (63) received the lowest ratings.

Chris Cummings, Director General of AIFA, commented: “AIFA strongly welcomes these impartial findings on fairness from the Financial Services Research Forum, and believe they provide a strong endorsement of the IFA profession.

“Not only is the profession the most trusted, but it is also regarded as the most fair – this is no mean feat given the recent economic conditions. It also further reaffirms that the public recognises the IFA profession’s core value: ‘The guiding light is to do well by the client’.”

The Bank of England’s Monetary Policy Committee (MPC) has announced that the base rate of interest has been frozen at a historic low of 0.5% for the ninth month in succession.

The MPC also voted to continue with its programme of Quantitative Easing (QE) – which was extended by an additional £25 billion last month to £200 billion – a move welcomed by businesses who believed that the economy would stall without it.

According to Nationwide House Price Index for November 2009, house prices increased by 0.5% – the same rate as in October.

The Lender also reports that year-on-year house price inflation has increased from 2.0% to 2.7%, and states that the Labour market has so far held up better than expected this year.

Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:

“The monthly rate of house price inflation for November is at a seasonally adjusted 0.5%, leaving the average price of a typical property 2.7% higher than a year earlier. At £162,764, the average house price is at a similar level to where it was in early 2006.

The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8% in September. This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.

“The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected.

With the UK experiencing its longest and deepest recession since WWII, most economists expected unemployment to increase very sharply in 2009, perhaps breaching the psychologically important three million mark by the end of the year.

While unemployment has indeed increased noticeably, the rise has not been as rapid and pronounced as previously feared. Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up.”

The Bank of England (BoE) has maintained interest rates at 0.5% for the eighth consecutive month.

The September data from Land Registry’s House Price Index shows that house prices in England and Wales have increased with a monthly house price increase of 0.9% up from 0.5% in August.

In Pembrokeshire house prices increased by 1.2% in September. The average house price is now £148,698.

The average house price in England and Wales is now £158,377. This is an annual drop of -5.6%, up from a low of -16.3% in February.

London experienced the greatest monthly price rise with a movement of 1.3 per cent. The average property price in the capital is now £314,954. All regions experienced a decrease in their average property values over the last 12 months.

The region with the most significant annual price fall was the North East with a movement of -8.2 per cent. Neath Port Talbot experienced the greatest annual price fall with a drop of 18.7 per cent.

The most up-to-date figures available show that during July 2009 the number of completed house sales in England and Wales rose by 9 per cent to 57,579 from 52,628 in July 2008. Monthly sales in England and Wales have risen steadily each month since January 2009 when they stood at 26,662.

As expected the Bank of England’s Monetary Policy Committee has voted to keep the base rate on hold at 0.5% where it has been since March this year.

Many commentators expect the rate to remain at this level until well into next year, with one even predicting rates will stay at this level for another five years.

The Bank of England also said that it was continuing with it’s £175 billion of quantitative easing, which it expected to take another month to complete.

According to the Halifax House Price Index, house prices have gone up for the third consecutive month.

The Index shows that house prices rose by 1.6% in September. Over the last 3 months (Quarter 3) they have risen by 2.8%, the first quarterly rise for two years (2007 Quarter 3) and the biggest since 2007 Quarter 1 (2.9%).

It is the third consecutive month house prices have gone up, giving an annual change of -7.4%, up from a low of -17.7% in April.

Martin Ellis, housing economist, said: “The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. The marked improvement in affordability due to the reduction in both property prices and interest rates since mid 2007 has been a key factor in stimulating higher demand.”

“Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand. There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale. This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months.”