An extra 146,000 transactions would have taken place in the property market in the five years to June 2017 if there was no Stamp Duty, analysis claims.

Research by the Centre for Economics and Business Research (CEBR), carried out for Santander Mortgages, claims the property tax stops “mutually beneficial” transactions between those moving up the ladder or downsizing, and also makes it less profitable for developers to increase supply.

The research looks at an example of an elderly couple living in a large home and a growing family looking to upsize. It claims both would be better off in each other’s property but are prevented by the high Stamp Duty costs.

The CEBR also claims Stamp Duty stops developers building more as prices are kept high due to a lack of supply. It claims that Stamp Duty is typically priced into the values of the new-build properties so any removal of the tax would hit their profits as sale values would be lower.

The analysis looks at how transactions would be boosted without the tax by using a transaction elasticity figure from the Office for Budget Responsibility that estimates how much transactions would be affected by a change in Stamp Duty.

The elasticity figure for each threshold was applied to the average number of transactions in the five years to June 2017, showing 2.5% overall or 146,000 more sales.

However, the report also warns that removing Stamp Duty is likely to increase house prices as the tax is often already priced into the value, so with no tax to pay a seller could demand more.

Miguel Sard, managing director of mortgages at Santander UK, said: “The report highlights the unintended consequences of Stamp Duty. First-time buyers struggle to get on the ladder, young families want to move up it and the elderly want to downsize, but all are stifled by Stamp Duty.

“Those aged between 65 and 74 have the greatest average property wealth in this country, and youths have the least. The housing market needs to allow for adjustments in demographics to be mirrored by the supply of accommodation.”

Christian Jaccarini, economist at the CEBR, said: “While the under-supply of housing has rightly received much attention, our research shows that Stamp Duty significantly impedes housing transactions, meaning that we don’t maximise the benefit from the existing housing stock.

“In fact, we estimate that 146,000 more transactions would have taken place in the five years to June 2017 if Stamp Duty was removed entirely.

“The Chancellor should seize this opportunity and make Stamp Duty reform a priority at the upcoming Autumn Budget.”