The proportion of homes being purchased by cash has hit record lows, Hamptons International claims.
Analysis of Land Registry data going back to 2007 by the agent shows there were 113,490 homes purchased by cash buyers in the first half of 2018.
This is down 21% annually and the lowest in five years, when 109,120 cash transactions were recorded in the first half of 2013.
Cash purchases made up 29.6% of transactions in the first half of 2018, compared with 30.2% at the end of last year and 33.6% in the first six months of 2017.
The proportion of cash purchases peaked in the second half of 2008, when 37.8% of homes were bought without a mortgage, the research shows.
|
Year |
Proportion of Cash Purchases |
Number of Cash Purchases |
Total Value of Cash Purchases (£bn) |
|
|
2007 |
H1 |
33.6% |
207,750 |
£ 44.5 |
|
|
H2 |
34.0% |
216,570 |
£ 46.4 |
|
2008 |
H1 |
35.1% |
129,840 |
£ 20.7 |
|
|
H2 |
37.8% |
101,180 |
£ 16.1 |
|
2009 |
H1 |
36.4% |
84,100 |
£ 15.4 |
|
|
H2 |
31.4% |
121,570 |
£ 22.3 |
|
2010 |
H1 |
31.7% |
94,390 |
£ 18.1 |
|
|
H2 |
33.2% |
119,180 |
£ 22.9 |
|
2011 |
H1 |
31.9% |
90,060 |
£ 17.0 |
|
|
H2 |
32.8% |
122,450 |
£ 23.1 |
|
2012 |
H1 |
31.7% |
97,230 |
£ 16.1 |
|
|
H2 |
33.0% |
118,070 |
£ 19.9 |
|
2013 |
H1 |
33.4% |
109,120 |
£ 18.4 |
|
|
H2 |
33.4% |
157,070 |
£ 27.4 |
|
2014 |
H1 |
32.8% |
144,380 |
£ 26.0 |
|
|
H2 |
33.4% |
168,590 |
£ 31.8 |
|
2015 |
H1 |
33.1% |
137,570 |
£ 26.3 |
|
|
H2 |
31.8% |
166,860 |
£ 33.4 |
|
2016 |
H1 |
32.0% |
145,040 |
£ 29.8 |
|
|
H2 |
30.8% |
148,850 |
£ 31.6 |
|
2017 |
H1 |
33.5% |
144,350 |
£ 31.2 |
|
|
H2 |
30.2% |
148,800 |
£ 33.2 |
|
2018 |
H1 |
29.6% |
113,490 |
£ 25.3 |
The south-west has the highest proportion of cash buyers in the first half of 2018, with 37% of homes purchased with cash, while London has the lowest at 21%.
However, where homes were being purchased with cash, increasing numbers are to live in rather than for buy-to-let, according to the research.
Property investors accounted for one in four cash purchases in the first half of 2018, down from 32% in the first six months of 2007, while just 2% were bought by developers in the same period of this year, down from 6% in 2007.
In contrast, 69% of homes bought with cash were purchased to live in, 14% more than in the first half of 2007.
Aneisha Beveridge, head of research at Hamptons International, said: “The proportion of homes purchased with cash has fallen to the lowest level on record.
“Today fewer than a third of homes are bought with cash. Housing affordability has a role to play in the decline, as does the drop-off in investor activity.
“Cash buyers have historically tended to be older generations downsizing by cashing in on equity gained from past house price growth.
“But recent slower price growth and higher Stamp Duty bills on new purchases have contributed to fewer downsizers, and as a result, fewer cash buyers.
“But not all cash buyers are older generations looking to downsize. Shifting investor sentiment has also contributed to the fall in cash buyers.
“Increased taxation for landlords and the prospect of weaker future gains has meant that investors accounted for just one in four cash buyers.”
Number of homes bought with cash |
% of homes bought with cash | Average cash purchase | |
| South West | 15,620 | 37% | £249,220 |
| Wales | 7,150 | 35% | £150,420 |
| North East | 5,610 | 33% | £116,860 |
| North West | 15,770 | 32% | £145,830 |
| Yorkshire and The Humber | 11,370 | 31% | £152,240 |
| Scotland | 13,830 | 31% | £136,120 |
| East Midlands | 10,050 | 29% | £180,500 |
| South East | 17,420 | 28% | £307,480 |
| East of England | 11,820 | 28% | £273,670 |
| West Midlands | 4,010 | 26% | £166,160 |
| London | 8,240 | 21% | £503,560 |
| England and Wales | 113,490 | 30% | £223,300 |
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