"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."
Covid-19 lockdown measures caused an expected slump in April property transactions, the latest figures from HMRC show.
Residential property transactions in April 2020 were 53.4% lower than April 2019 and 46.1% lower than March 2020.
Paresh Raja, CEO of Market Financial Solutions, commented: “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.”
John Phillips, national operations director at Just Mortgages, added: “It comes as no surprise to see that property transactions have basically been cut in half since the onset of Covid-19 – down 46% on March’s numbers and more than 50% on this time last year. But seeing these figures in black and white really does bring home the scale of the impact.
“In recent weeks we have started to see the sector returning to work and the early evidence is that activity is rapidly rising again. Just as with Brexit, people are fed up with having their lives put on hold and now the restrictions on movement are being eased, I believe we will see many people anxious to get on with long-planned house moves.
“As people have got used to remote working, there may even be a boost with more people looking to up sticks and live further away from their usual place of work.
“There is still a long way to go before this crisis is over but I’m confident that we are through the worst.”