Stamp duty freeze adds to the cost of downsizing later in life

What was confirmed and why it matters

Reports from Mortgage Introducer and Mortgage Solutions on 28 July confirmed that the government has ruled out stamp duty changes in the forthcoming Budget. The decision means the current rates and thresholds remain in place for the foreseeable future, with no return to the more generous temporary threshold that applied between September 2022 and March 2025.

That temporary window raised the nil-rate band for standard purchases from £125,000 to £250,000, effectively reducing stamp duty bills by up to £2,500 for buyers across a wide range of property values. When it expired on 31 March 2025, rates reverted to the pre-2022 structure. For anyone buying now — including those downsizing — the bill is higher than it would have been under the temporary rules, and higher than many were expecting when they began planning a move.

Current stamp duty rates

For a standard home purchase (not first-time buyer, not additional property), the current SDLT bands are:

• 0% on the first £125,000
• 2% on £125,001 to £250,000
• 5% on £250,001 to £925,000
• 10% on £925,001 to £1,500,000
• 12% above £1,500,000

On a £400,000 purchase, the stamp duty bill is £10,000. On £500,000 it is £15,000. These figures sit on top of estate agent fees (typically 1% to 2% of the sale price), solicitor costs for both sale and purchase, survey fees, and any removal or refurbishment costs associated with the move. For a homeowner selling a larger property and buying something smaller, the combined moving costs can easily reach £25,000 to £35,000 or more — money that comes directly out of the equity the sale produces.

Why moving costs are deterring downsizers

The Building Societies Association’s Property Tracker found that 30% of older buyers now cite stamp duty as a barrier to moving — up from 24% in previous surveys. That is a meaningful shift, and it reflects something that financial advisers and solicitors working with older clients have been observing for some time: many homeowners who would benefit from downsizing on a practical level are staying put because the financial case for doing so is weaker than expected once moving costs are accounted for.

The logic of downsizing is that a smaller property costs less to run, is easier to maintain, and frees up capital from the difference in sale and purchase price. But if moving costs consume £30,000 or more of that difference, the case becomes harder to make — particularly if the homeowner is also factoring in the emotional and practical disruption of a move, the risk of selling in a flat market, or uncertainty about where they want to live.

The result is that a significant number of older homeowners are sitting in properties they no longer fully use, with equity they cannot easily access without incurring the full cost of a move.

An alternative route to accessing property wealth

For homeowners who want to access some of the equity in their current property without incurring the cost and disruption of moving, releasing equity from the existing home is one option worth understanding. This does not require selling, does not trigger stamp duty, and does not involve estate agent fees or removal costs. Instead, it allows access to a portion of the property’s value as a lump sum or drawdown facility, while the homeowner continues living in the property.

The amount that can be released depends on the property value and the homeowner’s age, with older applicants typically able to access a larger proportion of the property’s value. The equity released does not need to be repaid during the homeowner’s lifetime; the loan and any interest that has accumulated is settled when the property is eventually sold.

This approach is not right for everyone — it reduces the equity remaining in the property over time, which affects what is eventually left in the estate — and understanding how it works in full is important before exploring it as an option. For a clear explanation of what equity release is and how it operates, see our guide to what is equity release, and to understand the figures that might apply to your own situation, see our guide to how much you could release.