In his budget speech yesterday, Philip Hammond seemed to provide some welcome news for first-time buyers, announcing that stamp duty relief will be extended to those who purchase properties up to a value of £500,000 through the shared ownership scheme
On top of this, the policy will be backdated to the last budget so that anyone who has purchased a property through the scheme since 22 November 2017 will be entitled a refund.
However, stamp duty across the board has not been fully addressed, and many homeowners could be deterred from downsizing.
Simon Stanney, Non-Life Products Director at SunLife believes the lack of action in this area will lead to even more pensioners turning to equity release.
Simon had this to say: "Almost a quarter of pensioners are more likely to downsize if they are exempt from stamp duty, according to YouGov1. But, despite calls to cut stamp duty for pensioners, the Chancellor has decided not to put any measures in place to make it easier and cheaper for older people to move and I think we will see a spike in equity release as a result.
While moving to a smaller, more manageable home, is the primary reason for many looking to downsize, releasing cash is the main driver for others2. And any pensioners who were waiting to see what would happen in the Budget before making a decision may now turn to equity release following news that stamp duty is here to stay.
Equity release offers a way of freeing up cash without having to move, and, as the sum released is tax free, I think we will see over 55s increasingly looking to equity release as a tax-efficient alternative to downsizing.”