You would think that retirement operators would be delighted with the Chancellor removing stamp duty from the sale of properties below £500,000 – but reactions have been mixed
John Tonkiss, CEO of McCarthy & Stone, which builds schemes all over the country, was among the more positive. “The announcement is a no brainer to reinvigorate the economy and a step we wholeheartedly support,” he declared.
“We’ve long argued that high moving costs have stunted the housing market. They keep older people stuck in large homes and prevent new chains being created that would ultimately benefit young people and first-time buyers.
“The timing is also important given the pandemic’s impact on the housing sector over the last few months. Hopefully it will help older people who have struggled in unsuitable housing during the crisis to feel supported to make a move to somewhere that can better meet their needs, be it a bungalow or a retirement community.”
short-term fix for a housing market that needs a long-term cure
But others like Eugene Marchese, co-founder and director of later-living developer and operator Guild Living didn’t think the cut, which ends in March 2021, went far enough.
“While we welcome the proposed stamp duty holiday, there needs to be a longer-term incentive for those looking to downsize,” he said.
“The decision to move out of your family home, which you may have lived in for decades, and into a retirement community is one of the most important that a person can make and can’t be rushed through in a few months.”
Nick Sanderson, CEO of Audley Villages which operates 18 high-end retirement communities, thought the cut should not divert focus from the need to build more homes for older people.
“This is a short-term fix for a housing market that needs a long-term cure,” he said. “We have been promised radical housing and planning reforms and these mustn’t be swept under the carpet in favour of attention-grabbing short-term initiatives.
“If the government is truly committed to solving the housing crisis and stimulating movement both up and down the property ladder it needs to address some fundamental flaws.
“There is a chronic shortage of specialist housing for older people in the UK. It’s all well and good giving people a financial incentive to move, but if the properties aren’t available, the numbers won’t ever add up.”
According to a recent Audley survey over half (51 per cent) of downsizers aged over 55 said the most challenging part of moving was finding the right property to move into.
Two in five (38 per cent) over 55s thought the best way to address the housing shortage was to provide greater support for people wanting to downsize and a similar number (36 per cent) wanted to see more suitable housing options for older people.
James Greenwood of property finders, Stacks Property Search, was more upbeat and thought the stamp-duty holiday would give downsizers confidence to move.
“One of the problems in the housing market is a reluctance amongst the older generation to leave the houses that have become too large for them,” he said.
“This will encourage downsizers, and free up the market at the middle and upper end of the market where there is a surplus of demand.”
Under the changes, homebuyers will not pay any tax on main homes up to £500,000 until 31 March 2021.
The average stamp duty saving will be £4,500, with nine out of ten buyers this year now paying no stamp duty at all on purchases.
The change will also include second homes, however, investors will still be subject to the three per cent stamp duty surcharge.
Previously, only homes below £125,000 and first-time buyers of homes up to £300,000 escaped stamp duty.