New report suggests it could be game changing
Anyone who has ever doubted the hold of stamp duty on the property market needs only to look at the times when changes have been made, even relatively briefly, to understand its impact.
The temporary changes to the tax thresholds which were put in place in September 2022 came to an end on April 1 this year, sparking heightened activity as homebuyers tried to save on their costs. The ‘nil rate’ band for home movers moved from £250,000 back to £125,000, and was estimated to have impacted hundreds of thousands of purchases.
First-time buyer mortgage completions jumped by 131% in March 2025 compared to the same month last year, according to figures released by Moneybox. The significant increase exceeded expectations - more than double what was expected. Mortgage application volumes were also up, rising 44% year-on-year, with many buyers focused on finalising deals before the deadline.
But while much of this activity is focused around the first-time buyer market, could stamp duty changes prove equally impactful for those considering downsizing and looking for the spur to do it? New research from national estate agency Jackson-Stops suggests it could - delivering an immediate boost to both housing supply and wider economic activity.
A stamp duty break for downsizers, it says, could encourage older homeowners to make a move and free up 500,000 Homes in a year. It believes this represents just the first wave, with 1.4 million potentially moving within two years, and - furthermore – it estimates that 2.8 million homes could be released to the market if stamp duty relief for downsizers was made permanent.
Its research, which looks at the impact of what it describes as the ‘prohibitive property tax’ on older homeowners, found that over a fifth - 22% - of over-55s never plan to downsize. However, among those who do intend to move, 15% said they would do so within the next year if stamp duty was reduced or removed on their onward purchase - the equivalent of 505,000 homes potentially released onto the market within 12 months. Looking slightly further ahead, 41% said they would downsize within two years under the same conditions, representing 1.4 million older home movers across England waiting in the wings.
According to Graham McClelland (pictured left), CEO of lender Gen H in the absence of ‘a magic house building wand’, a change to stamp duty is the single biggest reform that could boost homeownership. “It is effectively a tax on liquidity and aspiration,” McClelland told Mortgage Introducer. “I would like to see wholesale reform to stamp duty - potentially even its abolition. What we have today stops people moving home, reduces liquidity and simply makes it harder for people to get on the ladder. I would rather any reform was open to all, and not just the over-55s, but what is suggested is better than nothing. At Gen H we come across a lot of anecdotal evidence that stamp duty stops people downsizing so I have strong conviction this would help.”
He continued: “You would have to be careful putting an age on it. What if you were about to move, aged 53? Would you then pause for two years? I think if the view is that the tax works as a negative incentive then the entire thing should be reviewed top to bottom.”
READ MORE: Rate cuts: A market boost or a cause of market instability?
It may not be as effective a solution as it first seems
Broker Sheena Campbell (pictured centre), founder of Campbell Financial, is less convinced though. “On the surface, offering stamp duty relief to downsizers sounds like a practical way to free up larger homes and help growing families move up the ladder,” Campbell said. “But when you look a little closer, the wider benefit - especially to first-time buyers - becomes far less convincing.
“Personally, here in Northern Ireland, I don’t see a shortage of larger homes for growing families. It’s not a bottleneck we’re experiencing locally. The real issue lies further down the ladder - affordability and access for first-time buyers, not availability for upsizers. You could argue that if growing families vacate their homes, it could inject more first-time buyer stock into the market. But the reality is, downsizers are likely to move into those same properties. And if we suddenly introduce 500,000 equity-rich, often chain-free buyers into that space, competition increases, prices rise, and the market becomes even tougher for first-time buyers and landlords alike.”
Campbell added: “It’s a well-intentioned idea, but if the goal is to increase affordability and access, particularly at the entry level, this doesn’t feel like the right lever to pull. To me, it seems like we're trying to solve a small problem by making existing problems much worse.”
The findings from Jackson-Stops combines data from the English Housing Survey with responses from 2,000 homeowners aged 55 and over across England. The headline figures are modelled only on those who expressed an intention to downsize from their main residence. These respondents were then asked how stamp duty relief would affect the timing of their decision.
“Stamp duty is acting as a brake on the housing market, keeping older homeowners in properties that no longer suit their needs and blocking supply for younger families,” commented Nick Leeming (pictured right), chairman of Jackson-Stops. “Our research shows that stamp duty concerns rank alongside the stress and cost of moving as key obstacles preventing older homeowners from downsizing, with over a quarter citing it as making downsizing financially unattractive.
"With the right incentive, such as targeted relief on stamp duty for downsizers, over half a million people are willing to move in the next 12 months. In total, 2.8 million over-55s across England say they would downsize if stamp duty were reduced or removed, revealing the true scale of pent-up demand being held back by current tax policy. At a time when the Chancellor faces pressure to boost tax revenues, carefully designed stamp duty relief for downsizers could offer a valuable short-term solution - stimulating market activity, releasing homes, and generating additional tax receipts that might otherwise be delayed or lost."
Leeming continued: “Potential downsizers are out there and looking, but many still lack a driving reason to move from window shoppers to serious movers. This is often a generation of people who have lived in large family homes for many decades, finding themselves years later as accidental millionaires in which the value of their estate has largely been built on silent house price inflation and capital preservation. In reality, the combined costs of tax, removals, administration and legal fees create a significant mental and financial barrier compared to what they likely faced in their last move.”
He added: “If we want to encourage greater fluidity in the market and free up larger homes for growing families, reducing the cost of moving would be a good step. More sales stock would improve affordability for younger buyers looking to upsize, supporting intergenerational fairness and boost market activity to support economic growth.”
Jackson-Stops has projected the number of homes that would come onto the market over a five-year period if stamp duty relief was provided to downsizers. The data indicates that 1.8 million homes would be released within three years, rising to 2.5 million properties by year five. The most stock, it says, would be released in London, the East of England and the South-West.
Interest from downsizers surged in 2022, it suggests, with a 39% year-on-year rise in registrations, likely driven by post-pandemic life reassessments and a buoyant property market. But that momentum has since faltered, with growth dropping in 2023 and remaining relatively flat into 2025.
