Property transactions dive to their lowest level since mid-1990s

The number of property transactions made across the UK dived by more than 13 per cent in May – the biggest monthly fall since November – as the credit crunch continued to take its toll on the housing and commercial property markets.

According to HM Revenue & Customs, just 100,000 commercial and residential property transactions above £40,000 were completed in May, a third less than the same time last year, and almost 14 per cent fewer than the 115,000 transactions in April.

Transaction levels are attheir lowest since HMRC began collating monthly data in 2005, and are estimated to be at their lowest levels since the mid-1990s, when the UK was recovering from its last housing crash.

The figures are the latest in a string of negative property market statistics. According to figures from the Bank of England, the number of mortgage approvals fell by almost 50 per cent in April, compared with the same month last year, hitting a record low of just 58,000.

First-time buyers have found it increasingly difficult to get on the property ladder as banks and building societies have tightened their lending criteria, requiring ever larger deposits, and charging higher interest rates.

A growing number of households coming to the end of their fixed rate mortgage deals have had to stay with their existing lender, as they have had too little equity in their home to qualify for a new deal with another bank.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors,said: "These numbers clearly highlight the very real pressure on the residential property market. Indeed, Rics suspects that the level of activity willfall further over the coming months."