Zoopla has calculated that 4.3 million homes are now in a higher stamp duty bracket than at the start of the pandemic, thanks to rising house prices.
Its latest house price index also found that first-time buyers spend an average of £225,000 – up £27,000 on two years ago.
Whilst demand is 58% over the five-year average, and the supply of homes is starting to rise.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said: “The stamp duty holiday had a nasty sting in the tail. Hundreds of thousands of people have actually paid more tax, thanks to the huge hike in house prices fuelled by the tax break.
“Since the start of the pandemic, the average house price is up £29,000, pushing millions of homes into a higher tax bracket. And while an estimated one million people paid less tax during the stamp duty holiday, as soon as the window closed, hundreds of thousands of other buyers started paying the price.
“These higher tax bills are piling yet more pressure on buyers, who are already facing the stress of rampant house price rises, hikes in mortgage rates and runaway bills, which make it increasingly difficult to cover the cost of the mortgage.
“So far, all these pressures have done little to dent our enthusiasm for property. The demand for homes remains 58% above the five-year average. Right now, with property price rises running so hot, buyers may feel they can’t afford to take their foot off the accelerator, for fear of being left behind by the market.
“However, there’ll come a time when the pressure on buyers takes a toll. It could mean enthusiasm for property starts to cool, as the cost of living reaches a tipping point. Alternatively, the turning point may be precipitated by mortgage lenders, who raise rates and factor in higher costs to mortgage affordability calculations – cutting more buyers off from potential loans. Neither is likely to mean price drops, but either could significantly slow the pace of growth as we go through 2022.”
