Market insight - December 2017 / January 2018
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Interest on the Rise

Focus Economy Sales Lettings Stat of the month

Cash landlords spend a record £21 billion

Landlords have increased their housing wealth considerably over the last 10 years. This means cash purchases are steadily becoming a bigger part of the market. The rising number of landlords buying in cash means that over the last year they spent more than at any time in the last decade.

Over the last 12 months landlords buying in cash bought £21.0 billion worth of homes which is £0.2 billion more than in 2016 and a 32% increase on 2007 when they spent £15.9 billion. Much of this cash has come from landlords re-mortgaging to take equity out of homes they already own. Rising prices have allowed landlords to take equity out of both their personal or other rental homes to expand their portfolios.

The proportion of landlords buying in cash has steadily increased over the last two years.

Over the last 12 months 65% of all homes bought by a landlord were paid for in cash, surpassing the previous high of 60% set in 2011. This is the highest figure since Countrywide’s records began in 2007, a year when 60% of buy-to-let purchases were paid for with a mortgage.

Landlords buying in Northern England and Scotland are most likely to buy in cash. Seventyeight per cent of privately rented homes bought in the North East over the last 12 months were paid for in cash, with cash landlords spending £3.17 for every £1 spent by a landlord using a mortgage.

Landlords buying in London are the most likely to use a mortgage. London is the only region where mortgaged landlords outspent their cash backed counterparts – £1 for every 67p.

 

 

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