With over a million individuals waiting for housing, the UK faces a paradox: millions of bedrooms remain unoccupied within existing homes. Many houses are not only energy-inefficient but also costly to heat. Meanwhile, countless individuals find themselves without a home or living in unsuitable conditions.
The complexity of these issues means there are no straightforward fixes.
One potential solution could be for the Chancellor to consider eliminating or reducing stamp duty for older adults looking to downsize.
This approach could effectively open up more housing options for younger families.
Relocating is costly, and the additional burden of stamp duty can deter seniors from moving into more suitable homes for their retirement.
The Chancellor could take is to remove or reduce stamp duty for older people who want to downsize, writes Sir Nigel Wilson
Admittedly, implementing such a policy might present challenges for the Treasury. However, these could be managed by restricting the stamp duty reduction or removal to those transitioning into ‘integrated retirement communities’ that offer self-contained living, shared amenities, and access to care and domestic services.
Also, there could be a minimum qualifying age.
Some may object that it would be unfair for older people to be given a free pass on stamp duty.
But the dysfunction in our housing market affects everyone.
Such a change would create an additional incentive to drive up the quality of housing stock for all of us.
Sir Nigel Wilson (pictured) is group chief executive of Legal & General, which manages £1.3 trillion of assets
When people downsize, they typically release cash that can be used to support family members such as grandchildren, and help the next generation on to the housing ladder.
Getting the market to work better at every step of the ladder is critical for all. Our housing stock needs to reflect the changing needs that people have throughout their lives. And to achieve this, we should set ourselves bold objectives to build more housing for the elderly.
We need to construct 30,000 energy-efficient homes a year in areas where the need is greatest.
We also need to encourage people to plan for their later years, and to incentivise them through the tax system when appropriate.
Freeing people who have worked all their lives from stamp duty if they want to move to a retirement community would be a great start. If we open this door, it will lead to others, and that would encourage more ideas that can deliver even better results for the economy and society.
This would be good for everyone. Cutting stamp duty for later-life home movers is not an expense but an investment that should more than pay for itself.
- Sir Nigel Wilson is group chief executive of Legal & General, which manages £1.3 trillion of assets
