Stamp duty cuts not enough to help over-65s downsize
Cuts to stamp duty would help over-65s homeowners to downsize but there are other significant barriers to moving in later life, data has shown.
Around one in 12 homeowners aged over-65 across the UK would consider moving if stamp duty was abolished for last-time buyers, while 63% of estate agents agree with the abolition of stamp duty for older homeowners making a final house purchase, according to the latest research from the equity release adviser Key.
Additionally, 32% of older homeowners surveyed said cuts in stamp duty would be an incentive but admit it is not the only barrier to downsizing and 37% say it would have no impact on them.
Will Hale, CEO at Key, said that while making changes to stamp duty is likely to appeal to some over-65s, downsizing can be more complex than anticipated so a move like this could only be part of wider solution.
He said: “Our research shows 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 would not make enough money to justify this type of upheaval.
“When we speak to customers, we find that they are often very attached to their home and their neighbourhood so downsizing is not something they want to consider. And, if they do consider it, they may well want to take equity release out on their new house as they have not made as much as they hoped or they want to make some improvements to make it feel like home.”
Serious thought required
Hale noted that making changes to the stamp duty regime would only solve some of the issues the housing market and the older generation is facing.
“Serious thought needs to go into this to ensure that we do not create a situation 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,” he added.