Residential property transactions dropped by more than half in April 2020 when compared with the year before, HMRC data has shown.
The provisional, seasonally adjusted estimate of residential property transactions last month was 53.4 per cent lower than April 2019, and 46.1 per cent lower than March 2020.
Residential transactions of at least £40,000 stood at 46,440 last month, compared with 99,760 in April 2019 and 86,200 in March 2020.
Non-residential property transactions also took a hit, as the provisional seasonally adjusted estimate was 45.2 per cent lower last month than April 2019, and 22 per cent lower than March 2020.
Non-residential transactions at a minimum of £40,000 totalled 5,930 last month, compared with 10,820 in April 2019 and 7,610 in March 2020.
This comes after on March 23 the government announced a lockdown that effectively brought the property market to a halt.
John Phillips, national operations director at Just Mortgages, said: “It comes as no surprise to see that property transactions have basically been cut in half since the onset of Covid-19... But seeing these figures in black and white really does bring home the scale of the impact.”
Joshua Elash, director of property lender MT Finance, added: "We expect May’s data to be similar to this, if not worse. We need to get the market fully open and working again as quickly as possible if we are to limit the damage to the economy as a whole and the property sector specifically."
Robert Sinclair, chief executive of the AMI, told FTAdviser an approximate 30 per cent of mortgage brokers had been furloughed as a result of the lockdown.
Additionally, online broker Trussle said its mortgage enquiries fell by 37 per cent from March to April, although remortgage applications rose by 110 per cent in April year-on-year.
However, things are looking up. From May 13 anyone in England has been allowed to move home as part of the government’s plan to restart the housing market and lenders have already reintroduced physical valuations and higher LTV lending in response.
Shaun Church, director at mortgage broker Private Finance, said: "Huge pent up demand could be released as prospective buyers rush up to pick up their pre-lockdown property searches, while those who put their purchases on ice may try to rapidly push them through.
“However, friction in the market may intensify as buyers attempt to negotiate lower prices with their vendor. This may fall on deaf ears as sellers seek to crystallise pre-lockdown valuations. If pushed too hard, sellers may pull out of deals altogether, resulting in overall transaction levels stagnating.”
Fewer transactions also means less money for the taxman in terms of stamp duty and capital gains taxes.
Zena Hanks, partner at accountancy firm Saffery Champness, said: “The news of this unprecedented monthly decrease in the number of property transactions in the UK will be unwelcome news for the Treasury.
“To support the various government initiatives introduced to support individuals and businesses following the Covid-19 lockdown the Treasury are going to be looking at tax receipts with a very keen eye.