Ahead of the spending review and the housing strategy, the government is being encouraged to do more to boost homebuyer activity – starting by addressing the current rate of stamp duty for everyone buying a home to live in.
The call has come from the HomeOwners Alliance, which recently polled existing homeowners and found that high purchasing costs, including stamp duty, is preventing many people from moving home.
Paula Higgins, CEO of HomeOwners Alliance, said: “Our research reveals a housing market in crisis – not because people don’t want to move, but because they simply can’t afford to. With over 800,000 homeowners shelving their moving plans, we’re seeing families trapped in unsuitable homes, unable to upsize for growing children or downsize as they age.
“While house prices are difficult to control, the government does have levers it can pull and we hope to see this reflected in the spending review and the long-awaited housing strategy.
“Stamp duty is acting as a handbrake on the housing market. When a family faces a £10,000 stamp duty bill just to move to a £400,000 home – before they’ve even paid for surveys, legal fees, and removal costs – it’s no wonder a quarter of potential movers are staying put.”
Amongst this group of UK homeowners who wanted to move but did not, their main reasons were:
○ House prices (35%)
○ Stress of moving (35%)
○ Moving costs (28%)
○ Lack of suitable housing (27%)
○ Stamp duty (24%)
High house prices (cited by 35% as an obstacle) have consistently outpaced wage growth, making it increasingly difficult for homeowners to afford the next step on the property ladder. The moving process (35% cite the stress of moving as a barrier) continues to be in dire need of reform and must be part of any serious housing policy.
Some 27% stated a shortage of suitable homes as the reason for not going ahead with moving. Whether that means larger properties for growing families, step-free homes for older people, or affordable options in the right locations – a lack of the right properties is forcing homeowners to stay put. Even if they want to move, many simply can’t find a property that meets their needs or budget.
Stamp duty was cited by almost a quarter (24%) of UK homeowners that considered moving in the past two years but didn’t. For a family wanting to upsize to a home worth £400,000, stamp duty adds £10,000 to the upfront costs – and that’s before factoring in all the other moving expenses. It is a major barrier that is stopping 800,00 homeowners from right-sizing.
Higgins added: “We also need the right mix of homes. Older homeowners need step-free properties, growing families need larger homes, and everyone needs options they can actually afford. Government needs to look at the existing housing stock and how to help people move into homes that better suit their needs.
“Finally, although it may not grab headlines, making the home buying and selling process less of a Russian roulette game and more certain and streamlined would give people the confidence to move.”
Read the orginal article: https://propertyindustryeye.com/stamp-duty-acting-as-a-handbrake-on-the-housing-market/
