Proportion of house sales being made to cash buyers ‘lowest in over a decade’
Around three in 10 house sales are being made to buyers paying in cash – the lowest proportion seen in more than a decade – analysis has found.
Across England and Wales, 29.6% of home purchases in the first half of 2018 were made with cash rather than a mortgage, Hamptons International found.
It was the lowest percentage since research started in the first half of 2017.
Home purchases with cash peaked in the second half of 2008, when 37.8% of homes were bought without a mortgage.
The downward trend in the proportion of homes bought with cash reflects a drop-off in investor and developer purchases, Hamptons said.
Investors now account for around one in four (24%) house purchases in cash, down from a third (32%) in the first half of 2007.
Developers account for 2% of homes bought with cash, a fall from 6% in the first half of 2007.
Across England and Wales, the South West of England has the highest proportion of cash buyers, at 37% in the first half of 2018, while London has the lowest at 21%, the research found.
But in central London, Kensington and Chelsea was identified as a cash buyer hotspot – with 54% of sales in cash in the first half of 2018 with a typical price tag of £1.3 million.
West Somerset was identified as the biggest cash buyer hotspot, with more than three-fifths (61%) of sales in cash in the first half of 2018.
Aneisha Beveridge, head of research, Hamptons International, said: “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 in (the first half of) 2018, down from one in three in (the first half of) 2007.”
Hamptons International analysed figures from its parent group Countrywide as well as from the Land Registry to make the findings.
Here are the percentages of house sales where homes were bought with cash in the first half of 2018 and the average house purchase price by cash buyers, according to Hamptons International:
– South West, 37%, £249,220
– Wales, 35%, £150,420
– North East, 33%, £116,860
– North West, 32%, £145,830
– Yorkshire and the Humber, 31%, £152,240
– Scotland, 31%, £136,120
– East Midlands, 29%, £180,500
– South East, 28%, £307,480
– East of England, 28%, £273,670
– West Midlands, 26%, £166,160
– London, 21%, £503,560
And here are the top 20 cash buyer hotspots according to Hamptons International, with the percentage of house sales made to cash buyers in the first half of 2018 followed by the average cash buyer house purchase price:
1. West Somerset, 61%, £223,760
2. East Lindsey, 57%, £169,310
3. West Dorset, 56%, £285,360
4. North Norfolk, 55%, £254,100
=5. Kensington and Chelsea, 54%, £1,353,740
=5. Isle of Wight, 54%, £213,550
=7. Scarborough, 53%, £157,670
=7. East Devon, 53%, £279,060
=7. Torridge, 53%, £237,270
=10. Argyll and Bute, 52%, £138,850
=10. West Devon, 52%, £245,240
