UK housing stock would be better optimised if stamp duty was waived for the over-65s, persuading more people to downsize.
That’s according to a report from the London School of Economics which was commissioned by Family Building Society.
Tony Crook, a professor at the University of Sheffield who authored the report, argued that aligning council tax to property values would make more sense than an upfront tax like stamp duty, which encourages people to stay put.
And Christine Whitehead, a professor at LSE and another author, added that this could provide more cash to local councils.
Nick Sanderson, Audley Group chief executive said: “A stamp duty cut for downsizers should stimulate movement at the top of the market, encouraging people to move out of large family homes, but it’s important to remember that a financial incentive is just one part of the puzzle.
“And there is a significant issue to resolve before that the jigsaw is completed. There is a chronic lack of age-specific housing in the UK. If we aren’t giving people the properties to move into, in the right locations, the stimulus can’t achieve its full potential.
“The government must prioritise the delivery of age specific properties, and do so quickly. A minimum of 50,000 new units are needed every year to keep up with the ever-rising demands of the ageing population.
“This means decisive action from policymakers which greenlights the development of more specialist retirement properties and mandates their inclusion in any new development. While stamp duty continues to be debated, there is a supply challenge that has to be met.”
There’s been calls for a stamp duty cut for downsizers for years, but it’s generally deemed politically problematic, as it gives the message that the government is giving a handout to a generally wealthy group.
Another issue identified by the LSE report is the lack of joined up thinking in government when setting housing policies.
Whitehead and Crook said: “Without a more consistent and coherent approach housing conditions can only get worse.
“What we need is a strong government working across all government departments as well as private and public sector housing organisations with all following the same road map. Unless they do this, opportunities that can help frame and realise a positive future will not be grasped.”
Mark Bogard, chief executive of Family Building Society, echoed many in the industry by saying the revolving nature of the housing minister position has become “unacceptable”, given that we’ve had 16 housing ministers in 13 years.