Budget comment: “…the chancellor has yet again missed a vital opportunity to increase fluidity in the housing market…”

by | Oct 29, 2018

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Autumn Budget 2017

Jeff Bromage, managing director of Saga Personal Finance, said: “Whilst we welcome the changes to Stamp Duty for first time buyers, the chancellor has yet again missed a vital opportunity to increase fluidity in the housing market by reducing the cost burden for those right-sizing ready for retirement.

“Whilst many people in larger homes would like to downsize, three in five members tell us that the costs of doing so are often so prohibitive that it would eat up much of the benefit they would have hoped to gain. They tell us that this leaves them little choice but to stay put in houses that are not designed, or indeed appropriate, for them for the future. The Chancellor had a prime opportunity in this budget to allow one stamp-duty free move to those looking to downsize – and it needn’t be a cost to the exchequer!

“Whilst on the face of it it looks like a give-away, a stamp duty exemption could in fact lead to a house sale that might otherwise not have taken place. Independent economist analysis for Saga shows that any costs of this reform would likely be modest and in fact the exchequer could see a net gain in stamp duty revenue. This is because the cost of the stamp duty forgone would be counterbalanced by an estimated extra £461 million of stamp duty generated by higher volumes of consequential house sales. Whilst the chancellor has a huge task on his hands to balance the scales in this budget ahead of Brexit, our members will be sorely disappointed that yet again the he has chosen to take such a limited review of stamp duty as part of the wider solution to our housing crisis.”

 

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