The number of cash buyers has fallen to a record low.
In the first half of this year, the proportion of homes bought without a mortgage fell to 28%.
It is the lowest level since 2007, Hamptons International reported this morning.
There was a peak of 36% cash buyers in 2009, says the business.
According to Land Registry data, the average home bought with cash in the first six months of this year cost £217,810.
Most cash purchasers (68%) were owner-occupiers, while investors accounted for 24%, and second home owners for 5% of cash buyers.
Hamptons said that the fall in cash purchases reflects tighter affordability, and a decrease in the number of downsizers – the group of people most likely to have built up enough equity to buy a home with cash.
Comments (4)
I’d also say that It’s easier to validate a source of funds in the case of a mortgage. With the fear of sounding awkward , when it’s a cash buyer sometimes it’s easier to say to the buyer – can you please get a mortgage rather than provide all the in’s and outs of where you got your funds…
I’d put my money on it being more that money is so cheap to borrow it makes no sense to tie up all your cash in one purchase – if you can take out a small £30k, £50k mortgage for pennies interest why wouldn’t you?
Exactly! Sub 2% interest rates fixed for five years, why put the capital at risk in a slightly uncertain housing market? Borrowing is better for almost all cash buyers now!
Affordability tightening or money so cheap it appears better to borrow?