Barclays has proposed a tax incentive to address the housing crisis.
- The initiative aims to free up 3.8 million homes by encouraging downsizing.
- Barclays suggests offsetting moving costs against stamp duty for downsizers.
- Simplification of the moving process and more retirement housing are recommended.
- Critics question the fairness of the proposal, pointing to potential biases.
Barclays has put forward a strategic proposal aimed at providing tax incentives to downsizers as a means to aid the ongoing UK housing crisis. By encouraging downsizing, the initiative aims to free up 3.8 million under-occupied homes that could be made available to growing families in need of larger dwellings.
As detailed in a recent report, Barclays suggests that downsizers be allowed to offset their moving costs against their stamp duty bill when purchasing a new home. This approach is intended to reduce the financial burden associated with moving, thereby encouraging more under-occupiers to consider downsizing.
In addition to financial incentives, Barclays has emphasized the need for streamlining the moving process and increasing the availability of retirement housing options. These measures are seen as vital components in enhancing housing market liquidity and addressing the nation’s housing shortfall.
Barclays’ proposal aligns with findings from a report by Savills, which indicated that while over 60% of homeowners are aged over 60, they account for less than 10% of the housing market activity. This highlights a significant opportunity for improving the usage of existing housing stock through measures aimed at reducing the barriers to downsizing.
However, the proposed tax incentives have not gone without criticism. Some experts warn that such measures could disproportionately benefit wealthier homeowners rather than assisting first-time buyers or families facing economic pressures. Mortgage broker Martin Stewart expressed skepticism, noting, “Why incentivize the generation that have been the biggest beneficiaries of house price inflation over the past few generations?”
The head of research at Hamptons, Aneisha Beveridge, also weighed in, expressing concerns over the allocation of subsidies. She suggested that the financial support might be more effectively targeted elsewhere, especially as many downsizers are mortgage-free and have already greatly benefited from the rise in house prices over recent decades.
The debate over tax incentives for downsizers continues, highlighting the complex challenges within the housing market.
