Almost half (47%) of over-55s who are considering downsizing say their plans would be affected by the introduction of property taxes, according to new research from Audley Villages.
With 5.1 million over 55s considering a move, concerns are mounting about the potential impact on the wider housing market as the Chancellor prepares to deliver the annual UK Budget next month.
The rumours on property taxes are leading to caution for over 55s. A fifth (19%) are adopting a “wait and see” approach on their plans to downsize, 15% plan to try and downsize before any potential changes take effect and 13% are less likely to downsize at all.
The uncertainty is already beginning to reshape decisions at the top of the property ladder, potentially creating knock-on effects for the wider property market with as many as 2.4 million would-be downsizers plans impacted by the rumours.
Beyond uncertainty around upcoming taxation, other barriers to downsizing remain prevalent, with 56% worrying about the physical effort of moving, 46% being concerned about the cost of moving, and 36% worrying about limited housing choices if they were to downsize.
These concerns deepen as people get older. When over 65s were asked if they were considering a move, almost two thirds (63%) worry about the physical effort of moving, 48% worry about the costs, and 42% worry about limited house choices.
Nick Sanderson, CEO of Audley Group, commented: “The government must tread very carefully on the introduction of property taxes. Already the rumours are having an impact with potential downsizers putting plans on ice or even shelving them altogether. Disincentivising downsizing is a really risky game to play, with movement at the top of the ladder critical to the whole housing system.
“We know that the decision to downsize already comes with practical and emotional barriers, from the physical effort of moving to saying goodbye to a family home, often with year’s worth of memories. However, the fact that so many people have a limited choice is a failure of our housing system. There is a clear and pressing need for more age-specific housing options that are designed to meet the needs of people as they get older, with supportive communities at the core.
“It’s time that the potential of age-specific housing is truly recognised. Supply must be increased alongside incentives that encourage people, and particularly those moving in retirement living communities, to downsize into properties that match their needs.”
