Equity release advice firm Key believes that stamp duty reform could incentivise over-65s who are looking to downsize.
It says its research adds to figures from the Royal Institute of Chartered Surveyors (RICS) which also shows support for cuts in stamp duty to help downsizers and increases the call for reform of property taxes ahead of the Budget.
Key’s study found 8% of over-65s homeowners – the equivalent of 375,300 across the UK – would definitely consider moving if stamp duty was abolished for last-time buyers. Research among estate agents shows cuts in stamp duty command widespread support – 63% of estate agents would welcome the abolition of stamp duty for older homeowners making a final house purchase.
In addition, 32% of over-65s homeowners – more than 1.5 million – say 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: “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.
“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 wouldn’t 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 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 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.”
