Stamp Duty Relief for Downsizers Could Unlock 500,000 Homes in a Year, Says New Study

The UK housing market may be sitting on a major untapped opportunity — and it all comes down to stamp duty. New data reveals that a significant number of older homeowners are willing to downsize, but tax costs are holding them back.

According to fresh research, more than half a million homes could be released onto the market within a year if the government introduced targeted stamp duty relief for downsizers. The findings point to a policy gap that may be blocking supply, limiting mobility, and pricing out younger buyers.

New analysis by national estate agency Jackson-Stops suggests stamp duty is one of the biggest obstacles stopping older homeowners from moving. The study combines English Housing Survey data with responses from 2,000 people aged 55 and over across the UK.

It found that 15 percent of over-55s would downsize within the next 12 months of stamp duty on their onward purchase was reduced or removed. That’s the equivalent of approximately 505,000 homes becoming available, many of which would suit growing families or first-time buyers.

Yet right now, 22 percent of older homeowners say they never plan to downsize, with many citing stamp duty as a key deterrent. Jackson-Stops Chairman Nick Leeming commented: “Stamp duty is acting as a brake on the housing market. It keeps older people in homes that no longer suit them and blocks stock that younger buyers desperately need.”

More than a quarter of older homeowners believe that stamp duty makes downsizing financially unattractive — placing it alongside moving costs and emotional stress as the top reasons people stay put.

However, with the right incentive, such as a targeted stamp duty exemption, many would be willing to take the step. Jackson-Stops argues this could bring dual benefits: a boost in housing availability and an overall rise in tax receipts through increased transactions.

“At a time when the Treasury is under pressure to raise revenues,” Leeming said, “relieving stamp duty for downsizers could encourage movement, generate fresh activity, and free up much-needed homes — particularly for younger families.”

Policy experts agree that smarter tax incentives could help address the UK’s structural housing shortage without the need for large-scale new builds in the short term.

At Mortgage-Tek, we believe smart policy changes can unlock new opportunities — but timing matters. If you’re looking to buy, invest, or make a move in today’s shifting landscape, our experts can guide you through market trends, tax impacts and lender criteria with clarity.

Planning your next step? Let’s help you turn uncertainty into opportunity.