Will the stamp duty holiday have too much of an impact?

Early signs suggest the government’s stamp duty holiday is having the desired effect by stimulating housing market activity.

Countrywide has seen a 38% increase in buyers since it was announced, while in July a net 75% of surveyors saw a rise in new buyer enquiries.

The only research playing down its impact I’ve seen was from Trussle, though this could be down to the number of first-time buyers who look to buy through the online mortgage broker – who are still finding it hard to secure a 90% LTV mortgage.

The question for me is whether the stamp duty holiday will have too much of an effect.

Indeed, I find reallymoving’s research concerning, which predicted that annual house price growth will rise to 11.4% in October 2020.

For me UK house prices are high enough without being pushed up further by government intervention.

Those who’ve read a few of my blogs will know I’m a big critic of the stamp duty holiday, which for me sacrificed what would have been a stable recovery and replaced it with a pile-on from buyers.

Effectively the holiday prioritises the buyers of today over tomorrow, while it also creates a risky environment for those that do buy, because prices could drop again once the stamp duty holiday is over.

Of course, reallymoving’s research could be wrong or exaggerated – it could be the case of a company looking to create a good headline if you want to be a cynic about it.

Well in many ways I hope so. Otherwise there are signs that the holiday will create a boom bust effect on our housing market.