Britain's housing market is likely to a see a dip in activity when the current stamp duty holiday ends, the Council of Mortgage Lenders (CML) has said in their 2012 Budget Submission.
March is expected to experience what the CML refers to as an 'unhelpful bunching' in business as first-time buyers rush to beat the deadline on the 24th of the month, whilst the conclusion of the initiative is forecast to have a negative effect on house buying sentiment.
Bearing in mind the drop in movement predicted, the stamp duty holiday's end could signal a significant slow down in recovery, and the CML has reiterated its criticism of the way in which the system is implemented.
A quarter of first-time buyers in London and the south-east are affected by the 2.5 per cent tax at the £250,000 threshold, and it is the structure of the different brackets that increases the difficulty facing potential home owners.
With the government not expected to back down and extend the current holiday, renting could continue to be perceived as an attractive alternative for many; residential lettings agents may see more prospective tenants walking through their doors come the end of March.
At existing levels, first-time buyers do not have to pay stamp duty on properties that are under £250,000, but this will drop to include any houses worth in excess of £125,000 when normal levels are resumed.
Evidently, UK property investment will become more profitable if young people are priced out of the market and forced into the renting game.
Given that the government has not indicated any future plans for a similar holiday to be granted, it is not easy to predict how the housing recovery in Britain will fare once the current incentives are removed.
Taking into account the uncertainty of the buying market, the rental sector looks set to continue growing regardless of any developments.