Ryan Bembridge analyses the plethora of schemes aimed at first-time buyers entering and leaving the dysfunctional mortgage market
Downsizing
If houses aren’t moving enough across all tenures the question is how more homes can be freed up to keep prices under control, balance supply and prevent the need for first-time buyer schemes.
Peter Williams says older people need to be given more incentives to move to help the rest of the housing market, including first-time buyers, function properly. “The incentive at the moment is for people to stay where they are,” he says.
“There should be a stamp duty exemption,” he says. “If people were given financial benefits to downsize the boost to the wider market would be exponential. That’s not just an IMLA view – it’s a common sense view.”
Jeremy Duncombe agrees. “I support older homeowners getting some kind of tax or stamp duty relief,” he says. “If they’re downsizing from a £400,000 property to a £300,000 property should they pay it at all?
“There are two things the government can do to up transactions which is free up stock and build houses.”
Broadhead questions whether it will be possible to sell such a change to the electorate however. “People have talked about providing a stamp duty holiday but I think that’s quite difficult to sell politically because the generation we’re talking about have benefitted from extremely high capital growth on property so they’ve made major capital gains,” he says.
“The biggest challenge in downsizing is providing properties people are looking for, as people want to be near families and facilities and want to buy high quality properties with sufficient space because they’ve usually got a lot of stuff.”
Williams says more two bed homes need to be built to accommodate people looking to downsize, especially as people have a habit of adding to their home values by getting extensions.
“Housing stock is about bigger and bigger homes but we want people to downsize,” Williams adds.
“A number of three bed semis have now become five bed semis because of extensions which makes downsizing more expensive.”
