Proportion of homes bought with cash reaches lowest level on record
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Landlord purchases fall by £5.2 billion in 3 years

•In H1 2018, 29.6% of homes across England and Wales were purchased with cash (without a mortgage), the lowest level since Hamptons International’s records began in H1 2007

•Cash purchases peaked in H2 2008, when 37.8% of homes were bought without a mortgage

•113,490 homes were purchased with cash in H1 2018, totalling £25.3 billion in value, 21% less than the 144,350 purchases in H1 2017 which totalled £31.2 billion

•In H1 2018 investors accounted for one in four (24%) of cash purchases, down from one in three (32%) in H1 2007

•The South West has the highest proportion of cash buyers with 37% of homes purchased with cash in H1 2018, meanwhile London has the lowest (21%) 

New research published today by Hamptons International shows that in H1 2018, the proportion of homes in England and Wales bought with cash fell to 29.6%, the lowest level since the company’s records began. Hamptons International’s records started in H1 2007 when 33.6% of homes were purchased with cash and peaked in H2 2008 when 37.8% of homes in England and Wales were bought without a mortgage (chart 1, table 1). Please see notes to editors for methodology.

In H1 2018, 113,490 homes were cash purchases, totalling £25.3 billion in value according to Land Registry - the lowest level in five years. And 21% less than the number of purchases in H1 2017 (144,350) which totalled £31.2 billion in value (chart 2).

The downward trend in the proportion of homes bought with cash reflects a drop off in investor and developer purchases. Hamptons International Research using Countrywide data, shows that in H1 2018 investors accounted for one in four (24%) of cash purchases, down from one in three (32%) in H1 2007 and peaked at 43% in H1 2008 (chart 3). The same goes for developers who purchased just 2% of the homes bought with cash in H1 2018, down from 6% in H1 2007.

Conversely, the proportion of cash buyers purchasing homes to live in has increased. In H1 2018 69% of homes bought with cash were purchased to live in, 14% more than in H1 2007 (chart 3). The average investor purchasing with cash spends 31% less on a property than a cash buyer purchasing a home to live in, £162,860 compared to £235,480.

According to Land Registry figures the South West has the highest proportion of cash buyers, 37% in H1 2018, while London has the lowest. Cash buyers purchased one in five (21%) of homes in the capital in H1 2018 spending £4.15 billion (table 2).

But the proportion of homes bought with cash in London has also reached the lowest point on record, down from a peak of 27.1% in H1 2009. In London the average home bought with cash cost £503,560, more than double the average spent in the South West (£249,220) (table 2).

West Somerset has the highest proportion of homes bought with cash (61%) with an average price of £223,760. East Lindsey (57%), West Dorset (56%) and North Norfolk (55%) follow. Kensington and Chelsea bucks the London trend in fifth place with 54% of homes bought with cash in H1 2018 with an average purchase price of £1,353,740 (table 3).

Commenting Aneisha Beveridge, Head of Research, Hamptons International, said:

“The proportion of homes purchased with cash has fallen to the lowest level on record. Today less 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 (24%) in H1 2018, down from one in three (32%) in H1 2007.”

Chart 1 – Proportion of homes bought with cash

Source: Hamptons International & Land Registry       

Map 1 – Proportion of homes bought with cash by local authority

Source: Hamptons International and Land Registry

 Chart 2 – Total volume and value of cash purchases

Source: Hamptons International 

Table 1 – Cash Buyers Time Series in England & Wales (corresponds to Chart 1 & 2

Source: Hamptons International & Land Registry

Table 2 – Cash Buyers by Region (H1 2018)

Source: Land Registry

Table 3 – Top 10 Cash Buyer Hotspots (H1 2018)

Source: Land Registry

 

 

For further information please contact:

Alison Blease

Head of Research PR, Hamptons International

Tel: +44 (0) 776 96 77 825

Email: bleasea@hamptons-int.com

 

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