There were 89,700 residential transactions of property worth £40,000 or more in the month, according to figures released by HMRC, an increase of 1.5% on April but a drop of 11.9% on May 2015.
Home sales hit a new record of 171,220 in March as homebuyers sought to beat the Stamp Duty surcharge that came into force on April 1 in England, Wales and Northern Ireland and the equivalent increase in the land tax in Scotland.
This was confirmed by HMRC who said in the report that the “large increase in transactions for March 2016 followed by the substantial reduction in April is likely to be associated with the introduction of the higher rates on additional properties in April 2016.”
However, the report said that while property transactions in April and May were lower than the corresponding months in 2015, they were “substantially higher than the corresponding period last year for the three month period from March to May”, thanks to the record month in March.
Steve Bolton, founder of Platinum Property Partners said that the slowdown in housing activity following the introduction of the new property taxes was not unexpected.
“With uncertainty about the outcome of the EU Referendum it is unlikely that we will see any change in these market conditions until later in June,” he said.
However, he said that property remains a “great long-term investment” and that property investors must now be more professional than ever in how they run their business to meet tax and legislation demands.