Barclays in urgent call to Rachel Reeves over key budget decision

As Brits prepare for the upcoming “painful” changes Prime Minister Sir Keir Starmer has already warned about in the autumn statement, Barclays is advocating for some specific changes that could provide some relief for the future generation. In a plea to the Chancellor of the Exchequer, Rachel Reeves, the bank urged her to cut stamp duty, particularly for Brits who are trying to downsize their homes in their golden years.

Stamp duty is a levy paid on homes worth over £250,000, or £425,000 for first-time buyers, which goes from 5% to 12% depending on the price of the property. Meaning for a £1million home this could reach a steep £41,250 bill while the average bill sits at a sizable £9,000.

A number of people consider downsizing their properties, particularly in their later years, when the upkeep and maintenance become too much for them to handle or they no longer need so much space when their children have grown up and left the home. However, Barclays claims the current financial measures around downsizing are making over a million Brits delay this move.

This has a potential knock-on effect as first-time buyers, which are vital to keep the property industry ticking, struggle to get a foothold on the property ladder. Research by Barclays revealed around 85% of owner-occupied homes in the UK have at least one spare bedroom, which can be classified as “under-occupied” homes.

It also highlighted that 1.7 million of these households are open to moving in the next to years but many potential downsizers were put off by the costs of moving and stamp duty. UK Finance also found that the tax is a “major barrier” for older property owners, or “last-time buyers”, who want to downsize.

As a result, the economists are specifically calling on Reeves to make this group of Brits exempt from stamp duty. Barclays believes that with the right incentives 3.8 million households could shift to smaller abodes, freeing up properties and lowering their bills during the cost of living crisis.

It also noted that stamp duty is already suffering as property transactions stall, with £11.7billion collected last year expected to drop to £8.6billion this year. Barclays’ head of mortgages Mark Arnold told The Telegraph: “A stronger, more holistic strategy is needed to tackle the immense issues faced by the housing market, including the challenges faced in the demand side.”