Residential property transactions plunged by almost half in April in the wake of a bumper March.
The seasonally adjusted estimate fell by 45.2% last month, and was also 14.5% lower than the same month last year, according to April's HMRC Property Transactions report.
Jeremy Duncombe, director, Legal & General Mortgage Club, said the drop was unsurprising. "This is largely due to the slowdown of activity in the buy-to-let market, following March’s peak completions as investors rushed to finalise transactions ahead of the stamp duty deadline.
“It is house price inflation, and not a huge surge in transaction figures, that is the main culprit in sending the cost of owning a home in this country sky high.”
Duncombe predicted that transaction figures would now flatten in the run-up to the EU referendum on 23 June, as they did in the run-up to last year's General Election.
"Events that create uncertainty in the market tend to make borrowers more cautious, causing them to take stock and assess how the chips have fallen before they take any real action, ultimately leading to a more subdued level of transactions.”
Adrian Whittaker, sales director, New Street Mortgages, agreed that transactions were bound to fall after the March rush. “Though there has been a dampening in the market, rising house prices continue to show that the property market is highly competitive.”
David Brown, chief executive of London estate agency Marsh & Parsons, said: “April almost marks a fresh start, as the first month where higher rates of stamp duty are applicable on additional home purchases.
“The goalposts simply changed overnight, making it incomparable to an extremely hectic March, which was characterised by unparalleled activity from second home owners and buy-to-let investors rushing through completions."
Brown said April also fell short on an annual basis. “But when taken together with March, more property sales took place over these two months in 2016 than the same period last year.”
He said first-time buyers and home movers would take the reins of buyer demand over the coming months, while the dust settles on the buy-to-let market.