The Budget was a missed opportunity to encourage downsizing

Part of the answer is to create a system that supports downsizing in later life. This is well-established elsewhere in the world but less so in the UK, which directly constrains the options available for first-time buyers and young families hoping to get on and up the housing ladder.

“By moving to high-quality, purpose-built retirement housing, older people can downsize into vibrant, sociable communities that not only cater to their lifestyles but also significantly enhance health, well-being and independence”

To trigger this transition, we need sensible and sustainable reform to property taxes and charges. Better support for those at either end of the property ladder is essential to incentivise movement, unlock housing supply and create a more dynamic, accessible market.

A practical and effective first step which the Budget needed to deliver was reform of stamp duty. Granting exemptions or removing this tax for downsizers – particularly older individuals selling family homes to move into smaller properties – would remove what is in effect a tax penalty applied to people who simply wish to move a smaller property that better suits their changing needs.

Such a change has been shown to encourage more property transactions, kickstart market activity and improve access to family-sized homes for younger buyers. 

“We need to remove the barriers preventing homeowners from moving up and down the property ladder, helping people of all ages to live in properties that align with their needs”

This isn’t wishful thinking – it’s supported by research carried out by a major UK estate agent, Jackson-Stops, which looked at the impact of property tax on older homeowners. It revealed that if stamp duty were reduced or removed on their onward purchases, more than 500,000 homes could be released onto the market within 12 months.

For the sake of a fairer, more prosperous Britain, we need to remove the barriers preventing homeowners from moving up and down the property ladder, helping people of all ages to live in properties that align with their needs, and restoring the flexibility and fluidity which previous generations enjoyed before transaction costs and sparsity of supply locked up the market.

In the absence of anything in the Budget, a lot rests on the forthcoming housing strategy to reverse the decline of homeownership, break the housing gridlock, and bring to fruition the government’s ambitions of economic growth, better health outcomes and wider housing equity.

Spencer McCarthy, chief executive, Churchill Living