Just 59,000 residential properties worth more than £40,000 were sold during September, the lowest level since HM Revenue & Customs began issuing figures in this format in 2005.

The number was well down on the 126,000 homes sold during September last year (on a seasonally adjusted basis), and just over a third of the high of 154,000 transactions completed in December 2006. This year, the credit crunch has driven the housing market into its sharpest slowdown for many years.

The figures confirm that the government's move to increase the stamp duty threshold to £175,000, announced in the first week of September, failed to kick-start the housing market.

Instead, transaction levels, which have been declining since the start of the year, carried on falling as would-be buyers struggled to raise mortgages, while those that could find funds were deterred by falling house prices.

Over the past three months the number of properties bought and sold fell to less than half of last year's level. Despite a recent cut in interest rates, attempts by the government to refloat the banking system, and a cut in the burden of stamp duty, there is no sign yet of the property market coming out of its steep nose-dive.

Between July and September there were 188,000 transactions on a seasonally adjusted basis compared with 363,000 in the same period last year and 255,000 in the second quarter of this year.

So far this year 747,000 homes have changed hands compared with 1.2m in the first nine months of last year, and despite government moves to free up the mortgage market it looks as though the total for the year will be well below last year's 1.6m transactions.

A recent survey by the Royal Institution of Chartered Surveyors found that estate agents were struggling to sell even one property per week each on average. Furthermoe, the leading indicator of future activity - the number of new mortgages approved for house purchase but not yet lent - is down by 70% on a year ago, suggesting that sales and prices have further to fall.

Many lenders these days ask borrowers to put down at least 10% of the purchase price of a new home. The most favourable deals, at the lowest interest rates, are generally available only to those who can put down 30%, or sometimes even 40%, of their purchase price.