While i see what this is intended to do i have my doubts it will work given how the property market right now operates. In theory yes vacating larger homes should enable people to move up the chain but thats assuming they can get the mortgages for them something which is now a lot harder then it was a few years ago.
Second any pensioner selling their 3\4 bedroom house is going to have the rest of their retirement in mind and associated costs so will want max value for the property they are selling see point 1
. This and other measures that are being considered\implemented by this government are short term fixes to a much longer term problem that needs construction not moving the pieces round the chessboard.
As i have said in another thread councils need to start approving houses to be built that are affordable rather then just going for the higher value properties because they then rake in more council tax. There needs to be incentives for independent builders to construct more of the affordable housing so they have a good reason to do that rather then build estate after estate of high value housing trying to maximise profits.
This is a problem we have had for quite a while with no political will in the past to sort it out or plan for it to be sorted and whilst i applaud this government for finally trying to deal with it. I cannot help feel they are going about in the usual shorttermism way we are all too used to seeing rather then the long term approach that is really needed.