Coventry Building Society has called for Stamp Duty reform with targeted help for downsizers, as homebuyers paid £1.1bn in July, according to analysis of the latest HMRC figures.
So far this year, homebuyers paid £6.5bn in Stamp Duty, with the average bill during the first six months of the year being £9,661.
The current tax regime offers one-time support for first-time buyers, but does little to nothing to help downsizers, which could deter people from moving to a property which is the right size for their needs. This could impact the supply of larger family homes and prevent people moving up the ladder.
Homemovers currently start paying Stamp Duty at various percentages if the purchase price of the property is above £250,000.
In March 2025 this will revert to the previous thresholds, where home movers will start paying Stamp Duty if the purchase price is above £125,000.
Jonathan Stinton (pictured), head of intermediary relationships at Coventry Building Society, said: “The property ladder doesn’t operate as a one-way system.
“There are many people who want to move down the ladder as well as up, but the current Stamp Duty regime does more to deter downsizers than incentivise them.
“The concern here is that is we’ll have swathes of people living in homes which aren’t right for them anymore.
“Most people will want to downsize and save money, but it could cost people thousands of pounds to end up with something which is ultimately less valuable.
“There could be many cases where it just doesn’t make financial sense to move.”
He added: “The temporary thresholds are lightening the load for all homebuyers at the minute, but – like the Stamp Duty holiday before it – it’s short-term thinking which is only giving relief to buyers at a pinpointed moment in time.
“The long-term solution needs to come without a sell by date and aim to support buyers who need to move both up and down the ladder.”
