"In short, a 10-year peak in transactions last month was followed by a 10-year low."
On a non-seasonally adjusted basis, transactions are 30.1% lower than October 2020 and 48.4% lower than September 2021.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "After a stonking September where buyers rushed to complete on their property purchases in order to take advantage of the last vestiges of the stamp duty holiday, October was bound to see a drop-off in transactions.
"The markets continue to price in an interest rate rise in December although the Bank of England is hinting that the situation is ‘finely balanced’ with slowing growth and the energy supply squeeze, which won’t be helped by a rate rise. In the meantime, the dynamic nature of mortgage pricing has paused a little as lenders take stock. Not all mortgages are becoming more expensive – generally, rates on lower loan-to-value mortgages have been rising but on higher LTVs they have been falling. A 95 per cent LTV two-year fix is cheaper now than it was two years ago, making life easier for first-time buyers, who are so important to the overall health of the housing market."
Anna Clare Harper, chief executive of property consultancy SPI Capital, commented: "Housing transactions are important because they drive house prices, which both reflect and affect our confidence, and the economy.
"In the first month following the end of the temporary stamp duty reduction, UK housing transactions were down 28.2 per cent compared with October 2020 and 52 per cent lower than September 2021.
"In short, a 10-year peak in transactions last month was followed by a 10-year low.
"This is unsurprising, because stamp duty is a significant influence on affordability. Whilst buyers can borrow more from banks to pay more for housing, stamp duty has to be paid outright. For this reason, it can act as a catalyst for decisions to buy or not to buy.
"As for what next: we can expect a general slowdown in housing transactions, but a significant reduction in house prices is unlikely. This is because the cost of buying a new property is now higher, and the cost of holding on to a property remains low due to low interest rates and wide availability of low cost, fixed rate mortgages.
"Perhaps the biggest problem the housing market faces going forward is the shortage of available stock, which means that even as housing transactions fall, prices are likely to remain strong."
Rob Barnard, director of intermediaries at Masthaven, added: “Despite the end of furlough and the stamp duty holiday, it’s encouraging to see that property transaction figures remain robust. Against a challenging financial backdrop, prospective buyers continue to push ahead with purchase plans. The release of pent-up demand has shifted the housing market up a gear and the very much enduring “race for space” continues to play its part, reflecting the extent to which our lifestyle changes have kept the market particularly buoyant.
“However, with an imminent rate rise now widely expected, the industry needs to work together to navigate this new environment head on. For many homeowners, this could present newfound financial challenges, leaving them in need of guidance from brokers more than ever before. Supporting brokers during this time and ensuring that they are well-equipped to meet the evolving expectations of customers will be essential. In the face of high inflation and rising house prices further stretching affordability, specialist lenders must collaborate closely with the broker community to take this new era of lending in our stride.”