Stamp duty holiday withdrawals have “taken some of the heat out” of the UK housing market, according to the Nationwide.
The building society said house prices dropped slightly in July compared with June, but were still 10.5% higher than a year ago.
Any stamp duty savings have been outstripped by rising prices.
But the tax break, alongside the search for space, has created a housing boom during the pandemic.
The mortgage lender said the typical home cost £244,229 in July.
Annual house price increases were at a 17-year high in June, and slowed slightly in July.
Breaks for stamp duty, or the equivalent tax, were withdrawn in Wales at the end of June, and became less generous in England and Northern Ireland at the same time. The tax will return to pre-pandemic status by October.
“The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market,” said Robert Gardner, Nationwide’s chief economist.
“This provided a strong incentive to complete house purchases before the end of June, especially for higher-priced properties.”
The number of homes being sold every month has hit levels not seen since comparable records began in 2005.
Mr Gardner said the market for large properties had surged, while sales of flats had fallen.
The number of transactions involving properties bought for £500,000 or more increased by 37% over the 12 months to March, compared with a rise of 2% for all properties.
The search for space, indoors and outside, had driven demand for larger homes in which to live and work during the pandemic. Flats, without gardens and – in some cases – with issues over cladding and fire safety, have been more difficult to sell.
The Nationwide said there were signs that there would still be activity in the housing market, even if jobs were lost, the economy struggled and Covid support schemes were wound down.
Iain McKenzie, chief executive of The Guild of Property Professionals, said: “It is going to be interesting to see how the demand for properties changes as we come into the autumn.
“This will give us the opportunity to evaluate just how successful the stamp duty holiday has been at keeping the property market buoyant since the start of the pandemic.”
Nicky Stevenson, managing director at estate agent Fine & Country, said: “While the clamour in recent times has been for bigger properties with more outdoor space, we may see luxury apartments start to come back into vogue as the drift back to the office starts to gather pace in the big cities.”
