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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

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
I wanted a quick sale, which was a tall order, but Grant Andrew did not disappoint. Not only did I get an excellent price for my flat, but with no set office hours, Andrew and Anna-Marie were on hand every step of the way. It was less than a week from the initial call to first viewing. When the first prospective buyer pulled out, Andrew had the next buyer through the door within 48 hours. The sale was not completely problem free, but there was constant communication between their offices, the buyers and myself. And they were brilliant at helping to find practical solutions when we hit snags. The added bonus, is they found a buyer who was happy to take on my tenant, reducing stress on all sides. House buying and selling is traditionally a difficult affair, but Grant Berry\'s professional attitude means a lot of the stress is taken out of the process. The following keywords and features fully encapsulate the service that Grant Berry provides: availability, excellent communications, courteous, quick response, well timed updates, realistic evaluation, knowledgeable, trustworthy, and the extra mile.
Lisa Chapman | 30 November, 2019
Grant Berry secured an offer on our property within two weeks of the advert going live. We had only had two viewings during a four month period with another estate agent and received no feed back. Andrew met with potential buyers and gave us immediate feedback on how the viewings went. Both Anna-Marie and Andrew were open and honest with how things were going throughout the sale; a stark contrast to the other estate agent we had previously used. They were very professional, took lots of photos that showed our home in the best possible light and marketed the property well.
Andy Willcox | 26 September, 2019
Grant Berry helped me sell my house this summer. I found them proficient and knowledgeable from the very first meeting. Expert marketing of the property along with a professional, friendly service makes it easy to recommend local estate agent.
Tracey Gwinnett | 24 September, 2019
We used Grant Berry to sell my deceased mothers property and received the most excellent service. Andrew met us, outlined very clearly how they would market it and the fees involved. It was STC within a week of being put up for sale. However, when that buyer pulled out it was again sold within a week with no fuss. We were kept up to date at all stages of the sale with nothing being too much trouble. I would absolutely recommend Grant Berry to any prospective sellers. SK
Sandra King | 13 September, 2019
Really positive experience purchasing a house with Grant Berry. They were able to arrange viewings around the times that suited us and once the price was agreed, they managed the process well. There were no heavy handed sales tactics that you sometimes come across with the chain estate agents, have previously bought property in London. We have recommended Grant Berry to friends who will be selling in the local area shortly.
Terry De Sousa | 12 September, 2019
Just a thoroughly professional outfit. Friendly, knowledgeable and incredibly helpful. Took time to answers our emails promptly. Helped us every step of the way.
Geppetto Price | 10 September, 2019
These guys have been unbelievably supportive throughout our quite difficult house purchase. They have chased a number of other agents, mortgage advisers and banks for us and haven\'t left us in the dark at all for the 4-5month process. On top of that they have been extremely friendly and reassuring, which sometimes in a professional atmosphere can be lost. Will always recommend to anyone that is buying in the area.
Joe | 28 August, 2019
Fantastic service, different to all the others and a breath of fresh air that made my first home purchase stress free!
Caroline Jordan | 17 August, 2019
Very, very impressed with the excellent service we received when buying our house through Grant Berry. Anna-Marie and Andrew made the experience feel very smooth and stress free. They were incredibly well organised and pro-active. They responding very swiftly to emails, kept up to date with developments, and made sure that messages that had been sent from one solicitor had been received by the other. It felt like they were doing everything they could to help make the purchase smooth and successful for all parties. Can\'t recommend them enough.
Robert Moir | 15 August, 2019
Andrew and Anna-Marie sold my property in just one week – after it had been on the market with a larger agent for over 8 months. It may have been just lucky, however the support along a very trying and arduous journey to completion was second to none. I cannot thank them enough for all their care and diplomacy when things were getting rather tough. The care and detail in the pictures and the marketing of the property far exceeded my expectations and their professional attitude and advice are unparalleled. Grant Berry is a very rare breed of agent who really cares about their clients - both selling and buying - in what is usually a major life decision to sell or buy a house.
T Youngs | 13 August, 2019
We were selling an empty property inherited from my mum which was 100 miles away from where we live and so very difficult to maintain through the winter. Andrew went beyond the call of duty by sorting out the mail, reading meters and even cutting the grass in the spring. We didn't know any good solicitors and after some consideration decided to accept the ones recommended by Andrew. He gets an introductory fee for recommending them but was totally up-front about this and it was a good decision to make. Andrew has a good relationship with these solicitors and this made all the difference in the world. He was phoning them on a daily basis on our behalf. Anyone trying to sell a property at the moment will know that it is a buyers' market and I am sure we chose the best estate agent to sell the property
Rob | 31 May, 2019
We have used Grant Berry Estate Agents to buy and then sell our very first home, and have more recently last month used them again to sell our home and move to our new one. We highly recommend them, as they really do go above and beyond. They really care and it definitely shows in how they work with you.They are a pleasure to deal with through the whole process.
ShannenB | 24 April, 2019
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