The boss of one of Britain’s biggest builders is urging Rachel Reeves to give tax breaks to downsizers to kick-start the housing market.
John Tonkiss, the outgoing chief executive of retirement homes specialist McCarthy Stone, said too many ‘older people rattle around in homes that are too large for them’.
At the same time, he warned, ‘younger families are priced out of homeownership’ due to a lack of appropriate housing.
‘Britain’s housing market has long been a case study in dysfunction,’ Tonkiss told the Mail.
With the Chancellor finalising what looks set to be a brutal tax-raising Budget on November 26, Tonkiss called for ‘targeted stamp duty relief’ for those downsizing.
Stamp duty applies to the purchase of all homes above £125,000.
Plea: John Tonkiss is urging Rachel Reeves to give tax breaks to downsizers to kick-start the housing market
An elderly couple selling a £500,000 home and buying a property for £300,000 would face a stamp duty bill of £5,000, on top of estate agent fees and other costs. The Older People’s Housing Taskforce has suggested removing stamp duty for ‘last-time buyers’ on properties worth up to £425,000 to make such a move easier.
According to estate agency Jackson-Stops, stamp duty relief for downsizers could result in an extra 500,000 homes coming onto the market within just 12 months.
McCarthy Stone specialises in developments for retirees, meaning it stands to benefit from any increase in demand among downsizers looking for a suitable home for older age.
But Tonkiss argued it would also free up homes for younger families. He said: ‘Freeing up homes for families should not be treated as a lifestyle choice but as a matter of national importance.’ More than 1.2m over-55s have abandoned plans to move in the past two years with a third saying the lack of suitable properties has put them off entirely, according to a report by the HomeOwners Alliance.
Advisory firm Savills has found that over-60s own £2.9 trillion worth of housing wealth that is frequently ‘locked up’ in a broken ladder, with pensioners having nowhere to move.
With speculation mounting over reforms to stamp duty and a tax raid on expensive homes, Tonkiss warned changes ‘risk adding an extra layer of uncertainty to a market already impacted by high interest rates and weak supply’.
Tonkiss, who stands down at the end of the month, said: ‘The Chancellor is clearly in a difficult fiscal position. All her options involve trade-offs.
‘But this is a situation where the downsides clearly outweigh the benefits.’
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