By Sarah Brown and Richard Jones, BBC News”I’ve lived in an apartment for eight years now, and I haven’t seen a penny go into that building, and yet the house is still worth a million pounds,” said one property investor, who declined to be named.
“When I first bought it, the only way I could afford it was by borrowing a couple of hundred thousand pounds.”
Image copyright Getty ImagesImage caption The owner of the property told the BBC the property was worth £1.5m but had been “used as a pigsty” for yearsImage copyright ReutersImage caption A London-based property investor said he was still in the process of selling the property after his wife died and the money was lost in an estate agent’s online auctionsImage copyright AFP/GettyImagesImage caption This property in Kensington, east London, was previously worth more than £1mBut many investors were not convinced.
“It’s not that I’ve lost money, it’s that I’m not making any money, so it’s kind of like, ‘Oh, I can’t get on with it’,” said a property investor from Leeds, who also declined to give his name.
“I can see it becoming a bit of a waste.”
A new law in England and Wales will see properties subject to a stamp duty, meaning that they will need to be sold if the buyer does not pay for them within 30 days.
It comes after a property in north London was purchased by an anonymous buyer who left it unsold for almost three years.
It was bought for £2.7m, but in December it sold for just £10,000.
The property owner told the Daily Mail he had no intention of selling, but was still unsure about his future after his family passed away.
“The last time I had to sell was when I lost my wife.
That was one of the saddest things, but I didn’t want to be that person who had to go and pay for the property.”
The law was designed to discourage the speculation that can lead to property being sold in a hurry.
“Property is like a stock and it has to be traded in a way that makes money,” said David McBride, chief executive of the Property Association of England and Scotland.
“But there are also certain things that happen that make it not work that way, like if you sell a property you need to take the money out within a certain period of time and if that period of delay isn’t paid for then it’s very difficult to recover it.”
The government says stamp duty will be introduced to help deter such speculators.
Image copyright PAImage caption Stamp duty will apply to any new homes purchased before 1 December2017 and in England, Wales and Northern IrelandThe government will also impose a cap on the number of properties subject in future to stamp duty of £50,000 for a single-detached property and £1 million for a detached house.
The government is also introducing an income threshold for those who would be eligible to apply for a stamp exemption from stamp duty.
It is unclear how many people will be affected by the changes.
“There’s a bit more that we don’t know yet,” said Mr McBride.
“We don’t have all the information about exactly how many properties will be subject to the new stamp duty rules.”
But the Government says the new rules will save households £2bn a year by reducing the amount of debt that can accumulate.
“Stamp duty means you can take on more debt, which in turn means you have less money to spend on other things like a mortgage or buying a house,” said Nick Clegg, the Deputy Prime Minister.
“People who get stamp duty can save money, they can buy a house cheaper, and they can save a lot of money on their mortgage.”
Image caption There is still no firm date for the stamp duty changes, but they will come into force from 1 December, the day after the general electionThe rules will be rolled out across England, Scotland and Wales from 1 January, but the timing of the changes is not yet known.
The new rules come into effect from 1 November, meaning property buyers in the UK must wait until 1 December before they can sell a home.
The Government says stamp duties have already saved the taxpayer £2 billion a year, and the Government is considering introducing similar measures across the UK.
“For every million pounds that’s been saved by stamp duty we’ve also saved the economy £2,000,” said Chris Grayling, the Housing Minister.
“This is not just about stamp duty; this is about making sure the money is not wasted.”
Image: BBC News