UK Housing News
Pressure mounts on the treasury to reform SDLT ahead of the Spring Statement
New data reveals that just 14% of homeowners over 55 are considering downsizing – with the cost of stamp duty amongst the most significant barrier
David Hannah, Group Chairman of Cornerstone Tax, discusses the need for the Chancellor to prioritise first-time buyers through well-targeted reform
According to new data from later-living provider Pegasus, just 14% of homeowners over 55 are considering downsizing, with over half of over-55s expressing that they wanted to remain in their current family-home post retirement, a figure that increased to almost 70% amongst the 71-75 age bracket. When asked about the most significant barriers to downsizing, 35% specified the cost of stamp duty whilst 37% cited the overall hassle of moving. According to David Hannah, Group Chairman of Cornerstone Tax, the UK’s leading property tax advisory, the treasury ought to look at well-targeted reform to stamp duty as a means to bolster transactions and upward-mobility within the UK housing market.
Ahead of the government’s Spring Statement on March 6th, MPs have urged the chancellor to prioritise stamp duty reform as a means to generate new incentives within the market. One such proposal includes a prospective stamp duty cut for energy efficient homes, whilst others echo a report sponsored by Lord Mandelson and Lord Heseltine which asserts that elderly homeowners should be exempt from stamp duty outright. All the while, SDLT revenue has taken a significant hit in recent months as transaction numbers continue to fall year-on-year, implying a self-perpetuating cycle.
David Hannah, whilst welcoming the renewed focus on stamp duty, claims that more attention ought to be brought towards stimulating the property market’s lower-end. One easy fix for policymakers would be to reassess the current thresholds for stamp duty payment, homes that are valued at £250,000 or less are currently exempt, with a 5% levy being charged on homes valued between £250,000 and £925,000. However, with the current price of a UK home standing at £288,000, it’s clear that SDLT payment bands are long overdue an overhaul. According to Hannah, those looking to purchase properties on the mid-to-high end of the property market will, in turn, have a chance to sell their low-end properties as a result of an increase in demand from prospective buyers, encouraging movement and generating momentum within Britain’s frozen housing market.
David Hannah, Group Chairman of Cornerstone Tax, comments:
“SDLT payment bands have been long overdue for an overhaul as they have never been index-linked to house price inflation. An increase to these thresholds would stimulate activity at the lower end of the property market and allow first-time buyers to reduce the amount they need to borrow, thus improving their affordability calculations.
“As we all know, a rising tide lifts all boats, those looking to purchase properties on the mid-to-high end of the property market will now have a chance to sell their low-end properties as a result of the increase in demand from prospective buyers, contributing to further momentum within the housing market.”