We’re stuck in Britain’s DOWNSIZING GRIDLOCK
...and older homeowners say the one thing that’d help them free up properties for young families is a cut in stamp duty. So what are you waiting for, Mr Hunt!
DURING his 32-year career as a salesman for the American food giant Del Monte, Malcolm Clare was affectionately known by friends as the man who liked to say yes — after actor Brian Jackson in the company’s adverts, who approved 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 looks back on his career with fondness, happy to share pictures of himself dressed up in his pomp as the Man from Del Monte.
Yet, like many homeowners of his generation, Malcolm is now firmly in ‘no’ rather than ‘yes’ mode — that is, ‘no’ to stamp duty, the cost of which has recently prevented him from downsizing to a smaller property less than a mile from where he currently lives with 76-year-old wife 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 an issue that he has raised with Justin Tomlinson, Conservative MP for North Swindon, who lent him a sympathetic ear. And it’s a problem that many Tory MPs now firmly believe Jeremy Hunt, Chancellor of the Exchequer, should address in the Budget next Wednesday.
In a nutshell, they are calling for the Chancellor to abolish stamp duty for those wishing to downsize in retirement.
MEMBERSof the 107- strong One Nation Conservatives, a group of ‘moderate’ Tory MPs, believe such a bold step would free up the housing market, enabling people to move down and up the property ladder; increase the number of transactions; and provide a boost to the economy.
Earlier this week, the wellregarded Institute for Fiscal Studies (IFS) said that, although there was a ‘weak’ economic case for tax cuts, stamp duty on property purchases was ‘particularly damaging’ — and should be ‘towards the front of the queue for growth-friendly cuts’.
The calls from One Nation and the IFS follow a campaign launched earlier this month by Money Mail to abolish stamp duty
— a move that we believe would be welcomed by young and old.
It would also confirm the Conservative Party, which is struggling in the polls, as the main flag-waver for home ownership.
Stamp duty is seen by most homeowners as an iniquitous tax — a form of double taxation. It is also an impediment to moving home, because the rate ratchets up as the purchase value of a property increases.
Currently, a home mover pays stamp duty on transactions above £250,000. The rate is 5 pc on the value from £250,001 to £925,000; 10 pc from £925,001 to £1.5 million; and 12 pc on any surplus.
So, for example, someone buying a house for £500,000 currently pays stamp duty of £12,500, although from April 2025, this would rise to £18,750 if the nil-rate band falls back to £ 125,000, as the Government has said it will.
For a buyer of a £900,000 property, the respective stamp duty costs are £32,500 and £38,750. This tax charge is on top of other moving costs such as estate agency fees, solicitor’s fees, and removal van hire.
For Malcolm Clare, stamp duty is an ‘insidious’ stealth tax, a ‘national scandal’ which makes downsizing a ‘ financial nonstarter’. This is despite he and Lynne, a former secretary to the chief accountant of a financial services company, being desperate to move.
The Clares live in a four-bedroom house — it has been their home for 37 years. But they now want to move to a bungalow. ‘We’re not getting any younger,’ says Malcolm, ‘and the stairs in our home will become a challenge sooner rather than later.’
They thought they had struck gold last month when they spotted a three-bedroom bungalow for sale less than a mile away from where they live. ‘Bungalows on the market round here are as rare as hen’s teeth,’ he says.
They also attract buyers among both the young and old, resulting in them fetching premium prices.
It meant the bungalow would cost more than the price the Clares could get for their larger home — £435,000 versus £400,000.
As well as finding the money to plug the shortfall, the Clares would have had to pay stamp duty of around £ 9,250 plus estate agents’ fees ranging from £5,250 to £10,000, as well as other costs.
‘A move didn’t make financial sense,’ says Malcolm. A couple of weeks ago, he wrote to his MP Justin Tomlinson, who responded by saying that he, and the Conservative Party in general, supported changes to stamp duty that would enable people like him to downsize and release ‘family’ homes back onto the market.
Yet, understandably, he could give no assurances as to when any changes would come in.
‘Next Wednesday would do fine,’ says Malcolm.
It is a view shared by other readers. Anne Savory, from Kedington in West Suffolk, lives in a threebedroom bungalow with husband Ted. Both are retired, in their mid70s, and love the home they have lived in for the past eight years.
‘We have a massive garden with the River Stour at the bottom,’ says Anne, a retired accounts clerk. ‘But we’re getting to the stage where we can’t manage it and the house is far too big for us.’ Anne and Ted would love to move closer to their children, three of whom live in and around the Essex and Hertfordshire border.
But the cost of houses in these locations is proving off-putting.
For example, a two-bedroom bungalow in Bishop’s Stortford,