My son repeated year one and it was the best thing for him. He started school at four. I knew he wasn't ready but as a single mum at the time I just couldn't afford full time daycare anymore.
The teachers explained that it is always better to repeat a year very early rather than later when deeper friendships have been established. He is now in year 5 and I'm not sure he even really remembers repeating. He never mentions it.
My son had the same teacher for his repeat year and as it was a composite grade he was still with most of his friends. It made a huge difference to his confidence as he had already done much of the work the year before. He is now an excellent student and very happy and settled with life in general.
I do agree with PP that you should leave your son in the same school to lessen any trauma he may feel.