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Is stamp duty impacting house sales?

Why would anyone downsize? For example, if you are 70, retired, and living in a large detached house in Cambridge where you raised your children, but you don’t need so much space now, you could sell it and buy a smaller house, thus releasing equity.

On top of the lawyer’s and estate agent’s fees, and the other costs associated with moving, you would have to pay a staggering amount in stamp duty – wouldn’t you be better off staying put?

Many people clearly think so. Across England, there are more than a million properties occupied by someone aged 65 or older and with at least two spare bedrooms. And they’re not going anywhere: more than 90pc of the 10.3 million households lived in by someone 55 or older did not move home in the three years up to 2015.

Why not? A survey by Later Life Ambitions, a campaign group that represents a quarter of a million pensioners, found that half of its members said the cost of moving was the main barrier to them upping sticks, with 30pc specifically citing stamp duty.

Policy Exchange, a think tank, has come up with a solution to get around this: reduce stamp duty for older people. In a report published this week it said this would “incentivise a new wave of older homeowners to downsize – which in many cases is simply not worthwhile”.

It specifically called on the Government to remove the 2pc stamp duty band, levied on homes priced between £125,000 and £250,000, for older homeowners looking to move. This would save you £2,500.

Policy Exchange is far from the first to suggest a tax exemption for downsizers. Crossbench peer Lord Best, a member of the All Party Parliamentary Group on Housing & Care for Older People, has long argued that it would encourage pensioners to downsize, releasing family housing for younger buyers and stimulating the sluggish property market.

It wouldn’t have to be out of the kindness of the Treasury’s heart; academic research has shown that a 1 percentage point reduction in stamp duty could boost property transactions by 20pc – suggesting that easing the tax burden on downsizers would bring in more stamp duty overall.

The Institute of Public Care at Oxford Brookes University worked out that even if transactions rose by just 10pc, the exemption would generate £186m in extra tax revenue per year.

The Government is clearly capable of applying some imagination to stamp duty. A year ago it changed the rules for first-time buyers, removing the levy altogether on properties worth up to £300,000 and taking 5pc on the purchase price between that and £500,000. This saved first-timers up to £5,000 in stamp duty.

Policymakers have also supported younger buyers’ property dreams with schemes such as Help to Buy – which has incentivised developers to build homes for this age range at the expense of catering for downsizers. The only bigger barrier than stamp duty to pensioners moving home, according to a Bank of England survey, is that they can’t find a suitable property. Older homeowners are stuck, and the entire property market is suffering.

Enabling pensioners to move home is more than a matter of freeing up the market for others. Living in homes that are not fit for purpose can dramatically increase an older person’s isolation, from rattling around in empty rooms not to mention running costs.

Accidents that arise from unsafe homes are estimated to cost the NHS £2.5bn a year – about the same as the burden from smoking and drinking. Falls alone cost the health service £600m a year. And don’t forget the looming care crisis: The Policy Exchange report pointed to evidence showing that older people who move into housing more suited to their needs are less likely to enter a care home than those who live in mainstream housing.

HMRC says it has helped 180,500 people buy a home since the cut in stamp duty for first-time buyers, saving this group a collective £426m. Imagine what it could do by extending this relief to the other – much larger and more valuable – end of the property ladder.

New figures produced by HMRC and analysed by investment consultancy London Central Portfolio suggest that stamp duty receipts fell 8.5 per cent in 2018 compared to the previous year. The duty gathered for HMRC some £8.669 billion - that’s £802m less than a year ago. 

 

Information taken from Daily Telegraph 8.12.18 and updated with revenue fall information reported on Estate Agency Today web-site 4.2.19

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We used Grant Berry to purchase and sell properties in August this year and cannot fault the service they offer. They were efficient, knowledgeable and professional whilst still remaining warm and understanding. Buying and selling property is hugely stressful and we feel that both Andrew and Anna-Marie understand this and do everything in their power to facilitate a smooth and stress-free process. We were kept in the loop the whole time and Andrew attended each viewing at our property with enthusiasm. Not only would we highly recommend Grant Berry to anyone else but we will only use them for our property requirements going forward.
Catherine Dickinson | 16 October, 2020
Super service! Grant Berry were excellent communicators and helped us throughout the whole process of buying our first home. They really made what could have been a stressful time very easy. Thank you!
Emma Wilson | 10 September, 2020
Anna-Marie and Andrew thank you both so very much for the amazing service you provided us in getting our dream home. 5 stars isn’t enough! Everything was made easy and you kept us informed all the time. We cannot thank you both enough. We will be recommending you to anyone we know thinking of moving house. Emily and Edd Evans Morley
Emily Evans-Morley | 29 August, 2020
Brilliant service from start to finish. Even through Covid-19 Andrew did everything he could to make sure things ran as smoothly as possible. Would absolutely recommend anyone to use Grant Berry. One very happy family.
Amy Wilson | 18 August, 2020
Great experience! We felt well looked after all way through. Andrew Berry is knowledgeable, enthusiastic and professional. He has made a very rocky journey less stressful. Try them, you won\'t regret it!
Justyna Livermore | 16 July, 2020
Andrew and Anna-Marie are extremely nice people to deal with, they have a genuine interest to be professional from start to finish. Nothing is too much trouble for them and they bring with them a wealth of knowledge in their field. I would have no reservations in recommending them to anyone.
Annette Carter | 15 July, 2020
Absolutely outstanding service from both Anna-Marie and Andrew from start to finish, they kept us in the loop every week even during the Covid 19 pandemic, they were always there reassuring us and ensuring the sale and purchase went smoothly. They are two of the nicest people we have met and would highly recommended them to anyone.
Rosa De Simone | 7 July, 2020
I would have no hesitation in recommending Grant Berry. Throughout the whole process they have provided sound professional advice, backed up by detailed research of the local housing market. They followed up each viewing and gave us feedback and advice. Once we had secured a buyer they continued to drive the process in support of us and always kept us informed of the position of the prospective buyer. Much more than just professional advice and support was the emotional support we received at every stage and the excellent customer service.
Sue Chippington | 3 July, 2020
As if buying and selling a property isn’t stressful enough, add the country going into lockdown just as I completed my purchase, stress levels were through the roof. However, Grant Berry were there every step of the way offering their support and expertise, always at the end of the telephone and extremely professional. Observing social distancing when it came to delivering my keys on day of completion with a smile and gift, thank you for your support and I wish you all the very best going forward as we start to come out of this lockdown period.
Diane Unwin | 20 May, 2020
The most friendly, supportive and professional estate agents I have ever had the pleasure of instructing. House selling is stressful emotionally, physically and when you are a single parent, these things are even more so. Andrew Berry and his partner Anna-Marie Grant, could not have worked harder and been more committed to selling my house and provided me with the support I required all the time. A truly magnificent firm, professional, reliable, prompt, supportive, and a pleasure to work with.
Zoe Kirby | 13 May, 2020
Very pleasant experience. I bought and sold the house through Grant Berry, it was all very easy with their help. I would recommend them to everyone without any hesitation.
Alena Vachtova | 11 May, 2020
I purchased my house through Grant Berry. I am very pleased with the service provided by this agency. Andrew Berry was extremely helpful in all matters pertaining to the house purchase. Very helpful, courteous and always giving me updates on progress. He acted as a very good intermediary between myself and the seller and was instrumental in the successful purchase. Thoroughly recommended.
Alan Milne | 7 April, 2020
The team at Grant Berry have been friendly, responsive and professional throughout our house selling process. The effort taken by them to capture high quality photos really helped our property standout and attracted a large number of viewings. At every step of the process they have kept us well informed and in a timely manner. I highly recommend their services.
Daniel Rice | 1 March, 2020
Amazing service!! My flat was sold extremely quickly and at the asking price. Andrew was super helpful, friendly and quick throughout and I honestly couldn’t have asked for a better service. Highly recommend!
Isabel Ferreira | 20 February, 2020
I bought my house a few years ago through Grant Berry and when it was time to sell tecently I had no hesitation in using them to sell it! They are professional, personal and reliable too! Highly recommended
Vanessa Benton | 14 February, 2020
From our first meeting with Andrew through to the final key is being delivered we can only comment that the service was first class and we wouldn't hesitate in recommending Andrew and his team .
Nigel Lister | 13 February, 2020
I used Grant Berry to sell my late aunt\'s house in Newmarket. my aunt used them to sell her previous house And I know that she liked Andrew.I saw three firms. Andrew\'s knowledge and enthusiasm were obvious. He gave a higher valuation than the other 2 firms but was very confident in his valuation. We accepted an offer for the full asking price very quickly. their entire approach is fantastic and they excel in keeping the overall process moving, making sure that things are dealt with promptly by the right people and ensuring that communication is good. Brilliant.
James Tinworth | 9 February, 2020
Professional from start to finish and excellent feedback after property viewings. Wouldn’t hesitate in recommending them to anyone who was thinking of putting their house on the market.
Nicola Mitchell | 13 January, 2020
Excellent service throughout. They produced a very professional sales brochure with high quality photographs. The after sales service is also particularly good and this is important when the usual procedural hiccups occur.
Anna Cantillon | 3 December, 2019
Excellent service throughout. Andrew and Anna-Marie kept me up to date with throughout the process and sorted any issues promptly and efficiently. Thanks!
Kevin Gatland | 2 December, 2019
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