Tax Break: new call for stamp duty help to free-up larger homes

A building society is calling for stamp duty reforms to incentivise downsizing.

A statement from the Suffolk Building Society says it believes stamp duty reform could encourage homeowners who are looking to move down the ladder to a smaller property to make the move. 

This would help to free-up the property market at all levels and improve the supply of homes for growing families and first time buyers, too.

Research from the society has shown that 15% of UK homeowners said they would downsize or consider downsizing within the next five years, and 60% said they would be more likely to move to a smaller property if there was less stamp duty to pay.

The society says that while it isn’t appropriate for every older person, or empty nester, to downsize, its research suggests that more people might be persuaded to do so if changes were made to this tax. 

The right types of properties must also be available, in the right locations, and at the right price.

The society also wants Labour plans for dramatic increases in house building to include the self build community.

The Self-build and Custom Housebuilding Act 2015 requires local authorities to grant permission for suitable serviced plots of land to meet the demand for self-build housebuilding in their areas. However, the registers documenting available plots are not always actively promoted by local authorities.

Furthermore research by the society has found that a third of people are considering building their own home at some point and of those, 21% said they would undertake a major renovation to an existing property, 27% said they would opt for a knockdown/rebuild type of self build project, and 31% would prefer a completely new build.

And the society is also urging developers to include single-storey dwellings and bungalows within their plans.

According to the National House Building Council (NHBC) new bungalows have all but disappeared with only 228 registrations in Q3 2023. This is 70% down on the same period in 2022 and the lowest figure recorded by NHBC in its 80-year history.

Richard Norrington, the chief executive of the Suffolk Building Society, says: “As a mutual championing manual underwriting, we regularly engage with brokers and buyers both locally and nationally, allowing us to understand their needs, wants, and frustrations.

"There is a significant opportunity to create many new homes to meet the rising demand across the nation. However, it is crucial to consider the types of properties needed by today's and future homeowners.

“This means not simply encouraging housing developers to build similar estates across the country, but thinking about how diverse housing supply can be created. For example, by building new bungalows and incentivising downsizing to help older people move, and by incorporating self-builders into the mix to create new builds.

"We should construct homes that meet the occupants' requirements in terms of quality, space, location, and sustainability, rather than merely building to meet mandatory targets."