Rising levels of stamp duty have caused people to stretch themselves with highly geared purchases rather than moving up the ladder gradually, warned Mark Harris, chief executive of SPF Private Clients.
Harris claimed stamp duty has “gone too far” in light of subdued transaction levels and more people desperately taking out higher loan-to-value mortgages to purchase their ‘dream home’.
Harris said: “What we’ve seen is if you move you really move.
“Where in the past you might have moved four or five times before you found your dream home you often see people really going for it and saying ‘I’m not going to do it in four or five moves because it’s going to kill me on stamp duty; I’m going to do it in one’.
“I think it’s gone too far one way on stamp duty – the purchase market in particular has definitely slowed.”
In December 2014 stamp duty was reformed from a tiered to a slab structure – but in the process people buying homes worth more than £937,000 had to pay more tax.
And then in April 2016 the government introduced a 3% stamp duty surcharge on buy-to-lets and second homes.