The government should abolish stamp duty to ease the financial burden on homeowners and help fix the country’s housing crisis, according to a large section of people polled in a new survey by Yorkshire Building Society (YBS).

Titled ‘Housing Britain: the challenges of homeownership at every stage of the property ladder’, the YBS report polled 1,750 UK adults “to understand feelings and attitudes towards homeownership at every stage of the property ladder” from first-time buyers and second and third steppers, to downsizers.

Those surveyed argued that the government was responsible for fixing the housing crisis and could start by scrapping stamp duty. Two-in-five (41%) said scrapping the tax could address “some of the issues by easing the financial burden”.

Moreover, a majority expressed dissatisfaction with their current home.

Two thirds of Britons (59%) said they felt trapped in property that did not meet their needs, while a similar number (60%) claimed there wasn’t enough suitable housing in their local area to move to and that they had been forced to compromise.

Almost a quarter (23%) of downsizers – those looking to move into smaller properties in later life – pointed to the lack of suitable or available supply as their biggest barriers to moving.

The report added that this was restricting the availability of larger properties for second and third-steppers.

Nitesh Patel, strategic economist at Yorkshire Building Society (YBS), said scrapping stamp duty in certain circumstances could help to address the supply issue, adding that it was already part of a proposal by the society.

“One of our proposals is a one-off, no stamp duty relief for people downsizing. It should be available to increase the flow of properties into the marketplace,” he told Mortgage Introducer.

“Our research suggests that there are a large number of retired people who are living in homes that are too big for their needs. A majority of them would want to downsize but cannot find a more suitable property out there,” he revealed.

The stamp duty holiday introduced during the COVID pandemic and extended to July 2021, helped to stimulate the housing market, as overall transactions in the year to June 2021 increased by 19% compared to the previous 12 months, according to research by CBRE.

The stamp duty holiday, however, ended last September. But with the government now appearing to have abandoned a pledge to build 300,000 homes a year by the mid-2020s, urgent moves are needed to up the supply of homes.

The report also found that three quarters (75%) of home buyers said they feared homeownership was being “pushed out of reach” due to the lack of affordable homes, as well as the cost of moving.

Patel, however, dismissed the idea of building 300,000 dwellings a year as an impossible target anyway, due to the ongoing construction crisis involving the high cost of building materials, labour shortages and, most significantly, the fact that the small- to medium-sized firms that once did the lion’s share of the construction work went bust during the 2008 financial crash, meaning that no-one has effectively stepped in to fill the void since then.

Among other suggestions to bolster the supply of homes, he suggested changing planning laws, rebuilding derelict areas and incentivizing borrowers.

He said: “I think an important consideration is actually on the higher LTV, mortgage rate and mortgage products. That’s probably going to be more of a driving force in terms of helping people in the marketplace, particularly first-time and younger buyers.

“With the cost-of-living crisis, many young people are seeing a sharp decline in their real earnings growth, so that’s probably going to impact their ability to get on the housing market.”

Patel was also asked to analyse why a large percentage of homeowners were unhappy with their purchases.

“If you have a young family, you probably want to be close to schools, but you probably can’t get anywhere,” he said. “House prices close to good schools are also very expensive. (Equally) if you’re a retired person, you may just want a smaller property, but you can’t really find (a suitable) one.”