Residential property transactions dropped in April due to the lockdown measures, UK Property Transaction Statistics from HM Revenue & Customs show.
Seasonally adjusted transactions in April fell by 53.4% year-on-year and 46.1% from the month before.
There were 46,440 residential transactions last month, as well as 5,930 non-residential.
Shaun Church, director at mortgage broker Private Finance, said: “These latest figures expose the true impact the lockdown has had on the UK’s property market, with the government’s decision to freeze the bulk of transactions to reduce the spread of the virus resulting in the market hitting the wall hard.
“Transaction volumes may recover quickly following the government’s decision to reopen the property market in England.
“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.”
Buyers and renters were told to delay moving in late March, while last week they were given the green light to restart.
Paresh Raja, chief executive of Market Financial Solutions, said: “The decline in transaction numbers cannot simply be applied to buyers getting cold feet.
“The fact that many mortgage lenders have retreated from the market is also a factor.
“As a result, April proved a stressful period for buyers in the middle of a transaction – lenders were taking longer to deploy loans while others were not accepting new enquiries, putting property sales at risk of collapsing.
“Just as we saw during the global finance crisis 13 years ago, we are now seeing alternative finance providers working to fill the void left behind in the lending market by the big banks.
“And even as lockdown measures are slowly lifted, I believe it will be some time before mortgage lenders resume normal practice. As a result, there are opportunities for specialist finance companies to step up to the plate.”
Ben Johnston, director of property app Houso, said: “The HMRC numbers, revealing a huge drop in transactions thanks to Covid-19, are thankfully pretty historic.
“Since lockdown restrictions have eased, we have already seen signs of a housing market emerging from its slumber, with significant traffic to our site and people starting to get back to viewings.
“What is key now is that valuers stick to accepted offer prices pre-coronavirus – if that happens, people will get on and move, working within the new normal of socially distant viewings and moves. We are already seeing a surge of interest in rural homes with good internet and home offices, and we expect this to continue.”
This post has originally been featured in Property Wire.