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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

Our latest reviews from allAgents

I have just sold with Grant Berry for the second time and I cannot rate them highly enough. Both Anna-Marie and Andrew are the most professional agents in East Anglia. Their proactive attitude is reflected in their results, they have been continuously chasing up solicitors and buyers and keeping me in the loop. Grant Berry gave an honest assessment of the property and the property market and sold it very quickly - again! Thank you so much Andrew and Anna-Marie.
T Youngs | 10 May, 2021
We would have no hesitation in recommending Grant Berry, very professional service from start to finish, nothing was too much trouble and both Andrew and Anna-Marie supported us throughout.
Dena Thompson | 6 May, 2021
Extremely personable and helpful throughout the entire process. Having dealt with a handful of larger agents I found Andrew and Anne-Marie\'s tailored approach a breath of fresh air. Thank you both!
Neil Mottram | 4 May, 2021
We would highly recommend selling your house with Grant Berry Estate Agents. Andrew sold our house to us five years ago and we remembered how friendly and professional he was. So when we were looking for an estate agent to sell our house this year we did not hesitate to contact Andrew. We wanted an estate agent who would provide a personal service, conducting all the viewings and managing the communication with potential buyers, and Andrew and Anna-Marie certainly did that. In our opinion you would not get that level of service with a high street estate agent and certainly not with Purple Bricks! Thank you Grant Berry for enabling our sale to go as smoothly as possible.
Helen Bridge | 9 April, 2021
Andrew and Anna-Marie were complete professionals from the start of the process through to completion, helping us navigate through some choppy seas at times. The presentation of our property was second to none with more quality pictures than you would usually see. Andrew suggested a video tour would help the sale so we took up that option and we believe it was money well spent, showcasing our house beautifully. We were kept informed by Andrew and Anna-Marie all the way through the process and we were happy we used Grant Berry and were completely satisfied with the outcome. Thank you Grant Berry.
Tim Griffin | 25 March, 2021
Responsible. Respected my porperty. Good customer service. Responsive. Well presented. Reliable. Punctual. Gave me a first user trial on virtual tour. Admiral awareness of Covid restrictions.
anna fraser wilks | 27 February, 2021
This is the second time we have used Grant Berry, to buy a house and eventually sell the same house more recently. Andrew and Anna-Marie were outstanding in both the buying and selling process. Grant Berry sold our home very quickly from the property going on the market, this was down to the excellent photos, realistic video tour, professional yet relaxed sales style of Andrew, and quick pro-active work of Anna-Marie in scheduling the multiple viewings. The communication from day one all the way through to completing was very good, which helped keep us up to date and understand where our buyers were at in the process. I would not hesitate to to use Grant Berry again if or when we go on to sell our current property.
Dan | 22 February, 2021
We have just purchased a property from Grant Berry and must say both Andrew and Anna-Marie made the process a lot less stressful. Communication was excellent throughout the process (far better than our own estate agent who we used to sell our property) and we received regular updates on how the chain and process was progressing. I would happily recommend Grant Berry to any prospective buyer\/seller and would like to thank both Andrew and Anna-Marie once again for all their help.
Mike Warren | 8 February, 2021
An excellent company where customer service is right at the top of the list. Andrew and Anna-Marie were exceptional and really helped the whole buying process along.
Laszlo Mulato | 1 February, 2021
Can’t thank Andrew and Anna Marie at Grant berry. For selling our house. Both very professional and very good knowledge of the market and market resource. Very kind and pleasant to deal with any queries or questions always at the end of the phone to help out. Made what is a stressful experience pretty much stress free. Would recommend very highly to anyone.
Grant pearson | 28 January, 2021
Grant Berry offered an excellent, professional, helpful and reliable service throughout the process of buying and selling our properties. Both Andrew and Anna-Marie are extremely efficient and certainly went the extra mile on the sale of our property. We would not hesitate to recommend them and the highest praise we can give is that we would not consider using any other agent going forward.
Catherine Dickinson | 27 January, 2021
Grant Berry were exceptionally good at progessing our purchase, especially with the vendors solicitors, ensuring everything was resolved in a timely manner.
Michael | 15 January, 2021
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
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