UK’s downsizing gridlock: Older owners name for Stamp Duty minimize

During his 32-year profession as a salesman for the American meals big Del Monte, Malcolm Clare was affectionately identified by buddies as the person who preferred to say sure — after actor Brian Jackson within the firm’s adverts, who authorized the fruit it used: ‘The Man from Del Monte, he say yes.’

Today, 79-year-old Malcolm, from Swindon in Wiltshire, is long-retired and appears again on his profession with fondness, glad to share footage of himself dressed up in his pomp because the Man from Del Monte.

Yet, like many owners of his era, Malcolm is now firmly in ‘no’ moderately than ‘yes’ mode — that’s, ‘no’ to stamp responsibility, the price of which has not too long ago prevented him from downsizing to a smaller property lower than a mile from the place he presently lives with 76-year-old spouse Lynne.

‘The Government should encourage us golden oldies to move out of our big houses,’ he says. ‘But it has made downsizing an unviable financial proposition for many of us.’

It’s a difficulty that he has raised with Justin Tomlinson, Conservative MP for North Swindon, who lent him a sympathetic ear. 

And it’s an issue that many Tory MPs now firmly consider Jeremy Hunt, Chancellor of the Exchequer, ought to deal with within the Budget subsequent Wednesday.

In a nutshell, they’re calling for the Chancellor to abolish stamp responsibility for these wishing to downsize in retirement.

Members of the 107-strong One Nation Conservatives, a gaggle of ‘moderate’ Tory MPs, consider such a daring step would release the housing market, enabling folks to maneuver down and up the property ladder; improve the variety of transactions; and supply a lift to the financial system.

Earlier this week, the well-regarded Institute for Fiscal Studies (IFS) stated that, though there was a ‘weak’ financial case for tax cuts, stamp responsibility on property purchases was ‘particularly damaging’ — and must be ‘towards the front of the queue for growth-friendly cuts’.

The calls from One Nation and the IFS comply with a marketing campaign launched earlier this month by Money Mail to abolish stamp responsibility — a transfer that we consider can be welcomed by younger and outdated.

It would additionally verify the Conservative Party, which is struggling within the polls, as the principle flag-waver for dwelling possession.

Stamp responsibility is seen by most owners as an iniquitous tax — a type of double taxation. It can be an obstacle to transferring dwelling, as a result of the speed ratchets up as the acquisition worth of a property will increase.

Currently, a house mover pays stamp responsibility on transactions above £250,000. The price is 5 per cent on the worth from £250,001 to £925,000; 10 per cent from £925,001 to £1.5 million; and 12 per cent on any surplus.

So, for instance, somebody shopping for a home for £500,000 presently pays stamp responsibility of £12,500, though from April 2025, this may rise to £18,750 if the nil-rate band falls again to £125,000, because the Government has stated it is going to.

For a purchaser of a £900,000 property, the respective stamp responsibility prices are £32,500 and £38,750. This tax cost is on prime of different transferring prices akin to property company charges, solicitor’s charges, and removing van rent.

For Malcolm Clare, stamp responsibility is an ‘insidious’ stealth tax, a ‘national scandal’ which makes downsizing a ‘financial non-starter’. 

This is regardless of he and Lynne, a former secretary to the chief accountant of a monetary companies firm, being determined to maneuver.

The Clares dwell in a four-bedroom home — it has been their dwelling for 37 years. But they now wish to transfer to a bungalow. ‘We’re not getting any youthful,’ says Malcolm, ‘and the stairs in our home will become a challenge sooner rather than later.’

They thought that they had struck gold final month after they noticed a three-bedroom bungalow on the market lower than a mile away from the place they dwell. ‘Bungalows on the market round here are as rare as hen’s enamel,’ he says.

They additionally entice consumers amongst each the younger and outdated, leading to them fetching premium costs.

It meant the bungalow would value greater than the worth the Clares may get for his or her bigger dwelling — £435,000 versus £400,000.

As properly as discovering the cash to plug the shortfall, the Clares would have needed to pay stamp responsibility of round £9,250 plus property brokers’ charges starting from £5,250 to £10,000, in addition to different prices.

‘A move didn’t make monetary sense,’ says Malcolm. A few weeks in the past, he wrote to his MP Justin Tomlinson, who responded by saying that he, and the Conservative Party on the whole, supported adjustments to stamp responsibility that may allow folks like him to downsize and launch ‘family’ houses again onto the market.

Yet, understandably, he may give no assurances as to when any adjustments would are available in.

‘Next Wednesday would do fine,’ says Malcolm.

It is a view shared by different readers. Anne Savory, from Kedington in West Suffolk, lives in a three-bedroom bungalow with husband Ted. 

Both are retired, of their mid-70s, and love the house they’ve lived in for the previous eight years.

‘We have a massive garden with the River Stour at the bottom,’ says Anne, a retired accounts clerk. ‘But we’re attending to the stage the place we will’t handle it and the home is way too massive for us.’ 

Anne and Ted would love to maneuver nearer to their kids, three of whom dwell in and across the Essex and Hertfordshire border.

But the price of homes in these places is proving off-putting.

For instance, a two-bedroom bungalow in Bishop’s Stortford, Hertfordshire, the place one in all their kids lives, would value round £450,000, with a stamp responsibility invoice of £10,000. 

Although their Suffolk house is valued at extra, Anne says stamp responsibility and all the opposite transferring prices can be monetary ‘killers’. ‘If stamp duty was abolished or reduced, it would make all the difference,’ she provides.

‘The housing market would also receive a great boost and the bungalow we live in could become a family home again.’

Ray Martyn, from New Milton in Hampshire, additionally needs to downsize. Now in his late 70s and recovering from most cancers, the previous civil servant lives with spouse Louise in a three-bedroom bungalow with massive gardens back and front, that are ‘becoming a chore’ to take care of.

They not too long ago considered a two-bedroom condo in a brand new growth close by which might have value round £600,000 to buy. 

But they baulked on the £17,500 stamp responsibility invoice they’d have incurred, plus different transferring prices that Ray calculated at round £12,000.

Like the Savorys, the Martyns would be capable of launch fairness by downsizing — round £100,000 — however Ray says that cash can be earmarked for his or her three kids and 6 grandchildren. ‘I object to paying £17,500 in tax for moving house,’ says Ray. ‘The Government should think outside the box a little.

‘If it reduced or abolished stamp duty for downsizers, it would still receive value-added tax (VAT) receipts from bills charged by businesses involved in the house-moving process — solicitors, estate agents and removal companies. As it stands, we aren’t transferring. Time to search for a very good gardener.’

Chris Roberts, a former airline pilot from Great Bookham in Surrey, says the supply of appropriate houses for downsizers to maneuver into can be a key difficulty that must be addressed.

The 79-year-old says: ‘Where we live, many homes suitable 30 years ago for downsizing are no longer so as they have been extended — upsized. The result is we rattle around in our five-bedroom house rather than move.’

Fingers crossed for subsequent Wednesday — and a few excellent news on the stamp-duty entrance. Let’s get the housing market transferring (if you recognize what I imply).

[email protected]