Stamp duty reform could incentivise older UK home owners to downsize
Study suggests home owners aged 65 and over would welcome incentives to downsize
Stamp duty reform could incentivise home owners aged 65 and over in the UK to downsize, freeing up properties for families looking to move up the housing ladder, new research suggests.
Almost a third, some 32%, of those who are looking to sell and buy a smaller property confirmed that a stamp duty cut would be welcomed but the research from equity release advisor Key also suggests that there are other barriers preventing them from doing so.
The research also shows that 63% of estate agents would welcome the abolition of stamp duty for older home owners making a final house purchase.
Overall, the study found that around 620,000 over 65s have looked at downsizing but can’t find a suitable home while another 500,000 have done the sums and found out they wouldn’t make enough money to justify this type of upheaval.
Chief executive officer at Key, Will Hale said when they speak to customers, they find that they are often very attached to their home and their neighbourhood so downsizing is not something they want to consider.
Hale explained, and, if they do consider it, they may well want to take equity release out on their new house as they haven’t made as much as they hoped or they want to make some improvements to make it feel like home. When making these choices, it is vital that they get independent specialist advice as it will help them to fully understand all their options.
Making changes to the stamp duty regime would only solve some of the issues that the housing market and the older generation is facing. Serious thought needs to go into this to ensure that a situation is not created whereby people are pushed into doing something that is not actually in their best financial, emotional and social interests. Guiding customers through their options at this potentially difficult time is critical.