Barclays Bank, one of Britain’s largest mortgage lenders, has called on the government to offer tax breaks and financial incentives for downsizers to encourage them to move to smaller homes, potentially freeing up 3.8 million properties for families.
The bank is proposing to allow downsizers to offset moving costs against their stamp duty bill when buying a new home.
In a report released on Thursday, Barclays stressed that reducing the financial burden of moving house to house could encourage “partial occupiers” to move, helping to ease the housing crisis. Along with financial incentives, the bank called for measures to simplify the relocation process and build more retirement housing.
Barclays estimates that this could significantly increase the liquidity of the housing market, benefiting growing families who need larger homes. Mark Arnold, head of mortgages and savings at Barclays, said: “A stronger, more comprehensive strategy is needed to address the enormous issues facing the housing market.”
The call to support downsizing follows a report from Savills showing that over-60s represent 44% of homeowners, yet downsizers make up less than 10% of market activity. Lucian Cook, director of residential research at Savills, said reducing the stamp duty burden on downsizing could encourage more people to move, and make better use of existing housing stock.
However, critics argue that such tax breaks would disproportionately benefit wealthy homeowners, not first-time buyers or hard-pressed households. Mortgage broker Martin Stewart questioned the fairness of the plan, asking: “Why incentivize the generation that has been the biggest beneficiaries of house price inflation over the past few generations?”
Anisha Beveridge, head of research at Hamptons, echoed these concerns, noting that subsidies may be better directed elsewhere, especially since companies that downsize are often mortgage-free and have benefited most from growth. Housing prices in recent decades.
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