9 hours ago
Labour should give over-65s a stamp duty ‘freedom pass'
There's a growing problem in the housing market and it's hiding in plain sight. All over the country, large family homes are sitting half-empty. Children have long flown the nest, but their parents remain – more out of necessity than choice.
It's not that older homeowners are unwilling to move on. Many would happily swap a high-maintenance house for a smart, well-located flat that suits their needs. But the reality of downsizing in this country is daunting. It's expensive, emotionally taxing, and, in many cases, downright impractical.
Stamp duty is one of the biggest barriers. For someone in their 60s or 70s looking to downsize in London or the South East, it's not unusual for the tax bill alone to exceed £25,000. That's enough to stop even the most motivated mover in their tracks.
So, here's a proposal for the Government: give homeowners over the age of 65 a one-time exemption from stamp duty, provided they're selling their primary residence and buying a smaller home. Think of it as a Freedom Pass for housing – a way to ease the burden of moving later in life and unlock thousands of family homes in the process.
This isn't about forcing people out of their homes. It's about giving empty nesters the financial breathing room to make a decision that suits them – and benefits the wider market.
When a couple in Primrose Hill or Clapham move out of a four-bedroom house, it creates space for a growing family to move up the ladder, and a first-time buyer to finally get on it. A single downsizer move can create a ripple effect of transactions.
Imagine what this could free up for younger buyers. Almost four million older households, defined as aged 65 or more, under-occupy their homes, according to the English Housing Survey. A quarter have two spare bedrooms, while 40pc have three spare bedrooms and 21pc have four or more.
Would cutting stamp duty encourage more people to move and free up some of this space?
The closest way we can measure the potential impact of this policy change is to look at when the property tax was suspended during the pandemic. From July 2020 to July 2021, transactions increased by 19pc compared to the previous year. This is according to research from property firm CBRE, which concluded that the stamp duty holiday was key in stimulating this demand.
This effect was more greatly pronounced in pricier properties. Average monthly sales of properties priced between £500,000 and £925,000 were 47pc higher than 2017-19, while transactions in the £925,000 to £1.5m price band were 40pc above normal levels.
A stamp duty exemption would go a long way to helping free up space for upsizing families and first-time buyers. But we also need to talk about how hard it is for older homeowners to access finance.
Some downsizers need to borrow a modest amount to top up their purchase, but if they're no longer in full-time employment, mortgage lenders offer little flexibility. Even those with significant equity and solid financial histories are often shut out of the market.
We need more ways for people to access low-risk borrowing later in life. That might mean longer-term mortgages, more flexible affordability criteria or government-backed guarantees. Without this, many empty nesters find themselves asset-rich but trapped – unable to move because the financial system has written them off.
Then there's the problem of stock. Downsizing doesn't mean settling for second best. These are buyers who want to stay in the neighbourhoods they love, close to friends, services and familiar routines.
Too many new developments aimed at this demographic miss the mark, offering uninspiring homes in peripheral locations. If you've lived for 30 years in Dulwich, why would you move to a boxy flat on the edge of nowhere?
Developers need to do better. That means building thoughtful, design-led homes with storage, light, and enough space for the grandchildren to stay. It means walkable neighbourhoods with cafés, shops and transport on the doorstep. And it means understanding that 'downsizing' isn't about giving up – it's about choosing a home that fits the next chapter.
If we're serious about unblocking the housing market, we need to start with those who already have homes and might be open to moving, if only the system didn't make it so hard.
A one-time stamp duty exemption at 65. Smarter lending for older borrowers. Better, more appealing homes in the right locations. These aren't radical ideas – they're common sense. And if we get them right, we can get the whole market moving again.
Jonathan Brandling-Harris is co-founder of House Collective, an estate agency.
