An estate agents' body has issued an urgent stamp duty warning following the end of the holiday.
The stamp duty holiday was introduced in June 2020, then extended until June 30, 2021, to help homebuyers as well as boost the UK property market during the pandemic.
This meant the “nil rate” stamp duty band in England and Northern Ireland was temporarily raised to £500,000 in July 2020, enabling buyers to save up to £15,000.
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From July 1 this year, the holiday was tapered to £250,000, prompting a rush of activity before then as buyers looked to maximise their savings.
Buyers were still able to make smaller savings of up to £2,500 under the tapered holiday but, on Friday, the stamp duty threshold reverted back to its normal level of £125,000.
The government introduced the holiday in the hope that people would feel more confident about buying, selling and renovating, in turn supporting jobs and driving economic growth.
Following the end of the holiday, an estate agents' body has warned that the normal stamp duty thresholds are 'outdated' and called for a review.
Propetymark said the stamp duty holiday has been a success in helping people feel more confident about buying, selling and renovating.
But Mark Hayward, chief police advisor at Propertymark, warned the threshold was too low compared to the change in average house prices over time.
He said: "The temporary stamp duty holiday has been a great success, creating a healthy and flowing market which has encouraged more people to buy and sell.
“With the holiday at an end, it is now timely to review the outdated levels at which people start paying stamp duty to reflect market demand, average house price and wage growth, given the basic, pre-Covid rates have not changed since 2014.”
According to recent figures from Zoopla, the average UK house price has increased by more than £17,000 since the start of the lockdowns in March 2020 – outweighing the potential stamp duty savings to be made under the holiday.
Propertymark said its figures show the average number of buyers per branch a month increased by more than 100 between July 2020 and August 2021 during the holiday.
There was an average of 445 buyers per branch during that time, which is higher than the average of 340 between April 2019 and June 2020.
The number of sales agreed per branch increased to an average of just over 11 per month between July 2020 and August 2021, compared with eight in the 14 months beforehand.
Nearly one in five (19%) homes sold for over the asking price during the holiday, compared with less than one in 20 (4%) before it was introduced, Propertymark said.
At the peak of activity under the holiday, 40% of sales agreed were above the asking price in June 2021.
Propertymark said official figures have shown that the number of transactions increased by a quarter during the stamp duty holiday compared with the previous 12 months.
