Since the stamp duty hike in April the government has raked in an additional £424m in revenue, figures from HMRC show.
The vast majority of this figure was raised from properties valued below £250,000 which accounted for almost a fifth of transactions in the second quarter of 2016.
Andrew Lloyd, managing director of Search Acumen, said that the market is still strong despite the drag on the market caused by the rise.
He said: “Today’s figures show that despite a tumultuous three months in British politics, and the government’s decision to penalise those investing in additional properties, the residential and buy-to-let markets has stayed strong.
“In fact, the second quarter of 2016 saw a 10% jump in residential transactions from the previous year and was the highest recorded figure for this quarter since 2007. Although it may feel as though we are in a time of constant change and uncertainty, we can look ahead with some optimism despite the looming realities of Brexit. The market is fundamentally strong.
But he warned that the government’s move, whilst money spinning, could prove stymie the market.
He added: “However, the government has in many ways shot themselves in the foot. Instead of freeing up the lower end of the market for first-time buyers as promised by George Osborne, competition for these more affordable properties has intensified and therefore further squeezed out many first-time buyers from getting onto the housing ladder.
“Going forward, the newly appointed housing minister will need to focus his attention on delivering a working and sustainable housing market, especially for this end of the market.”