Demand for park homes is expected to rise following the Autumn Budget according to over-50s property specialist Regency Living, which says a combination of unchanged tax measures and new surcharges will push more downsizers toward lower-cost housing options.
The Chancellor, Rachel Reeves, delivered the Budget on 26 November after weeks of speculation over potential reforms to property taxation. In the end, far fewer changes materialised than forecast, but the government’s decision to largely maintain the status quo in key areas has significant implications for older homeowners considering their next move.
One of the most anticipated measures – a reform of Stamp Duty Land Tax (SDLT) – failed to appear. The existing thresholds remain in place, meaning downsizers purchasing homes above £125,000 will still face a substantial stamp duty bill.
And Regency Living reckons that this will force many to allocate a significant portion of the equity released from selling their current property toward tax, reducing the funds available to support their retirement.
CGT EXEMPTION
The government also chose not to introduce Capital Gains Tax on primary residences, a relief for long-term homeowners who have seen large increases in property values. The exemption, the firm says, will be especially welcomed by those planning to sell after decades of ownership.
The one major new housing-related measure – the introduction of an annual council tax surcharge on homes worth more than £2 million, dubbed the “mansion tax” – is expected to push some high-value homeowners to reconsider whether they remain in properties that have appreciated into the new bracket, particularly in London.
While the Budget delivered modest increases to the State Pension – £440 a year for the basic pension and £575 for the new State Pension – wider pension reform was limited. A new £2,000 cap on salary sacrifice pension contributions from April 2029 will bring additional National Insurance liabilities for those exceeding the limit.
SUBSTANTIAL SAVINGS
Tim Simmons, sales director at Regency Living, says the overall package could accelerate interest in park homes, which remain exempt from stamp duty.
“Stamp duty rules will continue to affect the vast majority of property purchases, including those made by downsizers,” he says.
“Park homes remain exempt from stamp duty, which means that any downsizers choosing this route can make substantial savings.”
ENHANCED RETIREMENT
He adds that many older homeowners could release significant equity by moving to a park home, either to enhance their retirement or to help younger family members onto the property ladder.
But he warns that structural issues in the wider market will persist and says: “Updated OBR modelling indicates that planning reform will bring only a modest easing of house price pressures, and that this effect will be gradual over the next decade.
“Anyone seeking to buy a first home in the near future is therefore unlikely to experience any relief from the high prices currently seen.”
