A leading market commentator is warning that transactions and prices will fall without the stimulus of the stamp duty holiday.
Karen Noye, mortgage expert at Quilter, says: “With the stamp duty holiday now completely off the table there is likely to be a deflation in house prices.”
She adds: “You can see how effective the holiday has been in attracting buyers to market at an economically turbulent time.
“While the massive changes to our working lives will have played a role in people’s decision to up sticks, the stamp duty holiday really gave people the impetus to make the move.
“Without the holiday many might have adopted a wait and see approach. However, the consequence of so many people choosing to take advantage of the holiday is that house prices have skyrocketed.”
Despite the huge surge in transactions the tax take from SDLT has fallen because of the stamp duty holiday.
HMRC data released at the weekend show that land and property stamp taxes receipts have decreased by 25 per cent from £11,600m to £8,670m between 2019 to 2020 and 2020 to 2021.
“All predictions point to an economically difficult winter with rising inflation, the prospect of Covid coming back with a vengeance and continuing supply issues” says Noye.
“These issues may slow down the property market considerably as there will no longer be the impetus of the stamp duty holiday to attract buyers to market.”
One financial services figure - Mark Bogard, chief executive of The Family Building Society - has even called for the stamp duty holiday to go on.
In a BBC interview he says the holiday which ended last week was "very elegantly crafted".
He goes on: “People seem to forget there was no [tax] holiday for buy-to-let investors. There was no holiday for second home purchases. There was no holiday for people buying from abroad.
Instead it created a wider stimulus as people spent significant amounts of money sprucing-up a property before a sale, on the transaction itself and then after moving into the new home.
He also argues that, with stamp duty in England and Northern Ireland not paid on purchases of up to £500,000, in the first phase of the stamp duty holiday, it benefitted the less wealthy areas of the country. That, he says, helped with the government's levelling-up agenda.
"I can't see any argument for not continuing with [the stamp duty holiday]” he concludes.