Expensive: The cost puts older homeowners off moving from homes that may no longer suit their needs
Millions of homeowners who would like to downsize are being put off because of the expense of moving and stamp duty, a new survey suggests.
More than a quarter of homeowners now want to downsize in retirement – so they can live in smaller, more manageable properties and free up extra cash for basic spending needs and luxuries, according to wealth manager Hargreaves Lansdown.
However, 22 per cent say they have not been able to make this move because it is too expensive – and a further 13 per cent blamed the cost of stamp duty in particular. An additional 12 per cent said they wouldn’t free up enough cash to make it worthwhile.
Stamp duty for house purchases is charged at 5 per cent for homes valued between £250,001 and £925,000 – rising to 12 per cent for properties worth more than £1.5 million.
The cost puts older homeowners off moving from homes that may no longer suit their needs and creates a dearth of suitable properties for growing families to buy.
The new research is backed by official Government statistics which show that of the people who moved home last year, only 3.4 per cent were aged over 65, compared with 42 per cent who were aged under 34.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, says: ‘The costs associated with a move will soon eat into any profit you may make from a sale.
‘Stamp duty is one such cost that can run to tens of thousands of pounds and really erode your purchasing power.
‘If you rely on downsizing too heavily to plug gaps in your pension planning you may find yourself having to make tough decisions further down the line.’