From tomorrow (July 1) until the end of September, the first £250,000 of a property’s value will incur no stamp duty land tax, compared to the more generous £500,000 in place since July last year.
Then in October, the stamp duty threshold will return to its usual level of £125,000, or £300,000 for first-time buyers.
Since July, Rightmove estimates some 1.3m buyers have benefitted from the stamp duty holiday across the UK.
But now, “lenders must pivot their attention to surmounting the challenge of the post-pandemic recovery”, according to Rob Barnard, intermediaries director at Masthaven Bank.
He continued: “The stamp duty holiday has certainly played a part in accelerating activity in the market [since the suspension of activity in the first lockdown] and the end of the tax holiday might well pour some cold water on the hopes of prospective buyers.”
So far, research from Rightmove has suggested, only 4 per cent would abandon their plans to buy a property if they missed either the June or September stamp duty deadline in England.
"We haven’t yet seen any significant increase in properties falling through so it looks like most are going ahead regardless," said Rightmove’s property data director, Tim Bannister.
He continued: "Though inevitably there will be some properties coming back onto the market later this week and next week if a buyer and seller are unable to agree new terms if the buyer misses out on the maximum stamp duty savings."
With stamp duty incentives fast becoming a thing of the past, Masthaven's Barnard said there were “bigger challenges to come”.
“The recent frenetic market activity has been at least partly artificial, driven by the release of pent-up demand and massive levels of government spending in many parts of the economy.”
This "artificial" market, or as Charlotte Nixon, proposition director at Quilter Financial Planning, dubbed it earlier this month, "a false market", means many in the mortgage industry are holding off making any bold predictions on house prices and borrowing levels.
Signs of a dwindling market began in April, when UK house price growth slowed for the first time since the implementation of the stamp duty break in July.
Between March and April, the Office of National Statistics’ latest index showed average house prices on a seasonally adjusted basis fell by 2.2 per cent.
According to other indexes, this trend has continued through to May and June. Nationwide released its latest house price index today (June 30), which found month-on-month growth was still down, having reached just 0.7 per cent in June, compared to 1.7 per cent in May.
