The number of homes sold plunged 45% in April following the introduction of changes to the stamp duty, HM Revenue & Customs (HMRC) has confirmed.
Various sets of data suggested that a slowdown would take place - Nationwide and Halifax both reported slowing price growth, and the Royal Institute of Chartered Surveyors (Rics) reported interest in buying a house fell to an eight-year low.
HMRC said there were 94,370 property sales completed in April, down from 164,400 in March. Of those, 84,320 were residential properties - the lowest April total for three years.
March saw a big rise in the number of property purchases and mortgage approvals and landlords and second-home buyers looked to complete before the new stamp duty tax came into effect on 1 April.
Since the start of the month, those buying a second property or for renting purposes had to pay an extra 3% in stamp duty.
Andrew Bridges, managing director of Stirling Ackroyd, said: “The wheels of the property market are turning – but not quick enough to meet demand. A rush of activity at the start of the year left both buyers and sellers in a whirl. Now things have settled down, the property market needs to settle into a steadier rhythm.
“In the majority of London, this is happening – with a healthy hum of buyers and sellers. But the old luxury corners of London are far quieter – the traditional top quarter of the market saw a 2.4% annualised fall in house prices in the last quarter of 2015. This means fewer properties on the market and ultimately less choice for buyers. Fortunately, this hasn’t spread too far. The East of London has shown its cards and is in a strong position – resistant to price falls and leading London’s property fortunes. Activity across the rest of the capital and the rest of the country now needs to catch up with the beacons of growth and optimism around developing hotspots.”